Jake owns a machine shop. In reviewing the shop’s utility bills for the past 12 months, he found that the highest bill of $2,800 occurred in July when the machines worked 1,400 machine hours. The lowest utility bill of $2,600 occurred in December when the machines worked 900 machine hours.
Requirements – using the high-low method
a. Calculate the variable rate per machine hour and the total fixed utility cost.
b. Show the equation for determining the total utility cost for the machine shop
c. If Jake anticipates using 1,200 machine hours in January, predict the shop’s total utility bill using the equation from requirement (b).
Question 2
Compute the missing amounts for the following table (show all computations)
A B C
Number of units 260 units 720 units 1,500 units
Sales price per unit $20 $8 $25
Variable costs per unit $8 $2 $20
Total fixed costs $14,400 $12,000 $5,000
Target profit $36,000 $15,000 $$20,000
Calculate :
Contribution margin per unit
Contribution margin ratio
Required units to achieve target profit
Required units to breakeven
Required sales dollars to breakeven
Question 3
Clarke manufactures and sells two products. The first product is a disposable shaving razor blade that lasts about 7 days. The second product is shaving cream. Customers of the first product use one bottle of shaving cream every 28 days. As a result, razor blades outsell shaving cream by a 4:1 ratio. Shaving Cream sells for $8 per bottle, and has a contribution margin ratio of 50%. The razor blades sell for $3 per blade, but only generate variables costs of $1.50. The company’s total fixed costs are $3,500,000.
Requirements:
a. What level of total sales is necessary to achieve break even?
b. If a competitor began selling razors that forced Clarke to reduce the price for its razors to $2.50 (to maintain market share and the 4:1 ratio of razors to shaving cream), how many Razor sets must be sold for the company to break even?
Question 4
Cyber Inc manufactures networking devices for personal computer systems, using just-in-time methods. After receiving an order for 300 devices, the company bought materials (for cash) costing $14,000 to fill this order. It incurred labor and overhead costs of $48,000, of which $10,000 was for wages and the rest overhead.
After the production was finished, but before all goods were sold, the company needed to compute an inventory cost for financial statement purposes. The cost of finished goods inventory was $2,480.
Requirements:
a. Use T-accounts to show the flow of costs under traditional costing system
b. Prepare journal entries for these transactions using backflush costing.
c. Use T-accounts to show the flow of costs using a JIT system with backflush costing.
Our website has a team of professional writers who can help you write any of your homework. They will write your papers from scratch. We also have a team of editors just to make sure all papers are of HIGH QUALITY & PLAGIARISM FREE. To make an Order you only need to click Ask A Question and we will direct you to our Order Page at WriteDemy. Then fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Fill in all the assignment paper details that are required in the order form with the standard information being the page count, deadline, academic level and type of paper. It is advisable to have this information at hand so that you can quickly fill in the necessary information needed in the form for the essay writer to be immediately assigned to your writing project. Make payment for the custom essay order to enable us to assign a suitable writer to your order. Payments are made through Paypal on a secured billing page. Finally, sit back and relax.
Do you need an answer to this or any other questions?
About Writedemy
We are a professional paper writing website. If you have searched a question and bumped into our website just know you are in the right place to get help in your coursework. We offer HIGH QUALITY & PLAGIARISM FREE Papers.
How It Works
To make an Order you only need to click on “Order Now” and we will
direct you to our Order Page. Fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Are there Discounts?
All new clients are eligible for 20% off in their first Order. Our payment method is safe and secure.
