Question 1:
Prepare journal entries to record the following production activities.
1 Purchased $30,000 of raw materials on credit.
| Event |
General Journal |
Debit |
Credit |
| 1 |
Raw materials inventory |
$30,000 |
|
| |
Accounts payable |
|
$30,000 |
2 Used $21,000 of direct materials in production.
| Event |
General Journal |
Debit |
Credit |
| 1 |
Goods in process inventory |
$21,000 |
|
| |
Raw materials inventory |
|
$21,000 |
3 Used $19,500 of indirect materials.
| Event |
General Journal |
Debit |
Credit |
| 1 |
Factory overhead |
$19,500 |
|
| |
Raw materials inventory |
|
$19,500 |
Question 2:
Prepare journal entries to record the following production activities.
1 Incurred total labor cost of $83,000 which is paid in cash
| Event |
General Journal |
Debit |
Credit |
| 1 |
Factory payroll |
$83,000 |
|
| |
Cash |
|
$83,000 |
2 Used $64,000 of direct labor in production.
| Event |
General Journal |
Debit |
Credit |
| 1 |
Goods in process inventory |
$64,000 |
|
| |
Factory payroll |
|
$64,000 |
3 Used $19,000 of indirect labor.
| Event |
General Journal |
Debit |
Credit |
| 1 |
Factory overhead |
$19,000 |
|
| |
Factory payroll |
|
$19,000 |
Question 3: Prepare journal entries to record the following production activities.
1 Transferred completed products with a cost of $133,000 to finished goods inventory
| Event |
General Journal |
Debit |
Credit |
| 1 |
Finished goods inventory |
$133,000 |
|
| |
Goods in process inventory |
|
$133,000 |
2 Sold $448,000 of products on credit. Their cost is $166,000
| Event |
General Journal |
Debit |
Credit |
| 1 |
|
$448,000 |
|
| |
|
|
$448,000 |
Question 4:
Bloom Company management predicts that it will incur fixed costs of $261,000 and earn pretax income of $393,900 in the next period. Its expected contribution margin ratio is 59%.
1 Compute the amount of total dollar sales.
2 Compute the amount of total variable costs.
Sales
Fixed Costs
Pretax income
Variable costs
Question 5:
Felix & Co. reports the following information about its sales and total costs.
| Period |
Units Sold |
Total Costs |
Period |
Units Sold |
Total Costs |
| 1 |
0 |
2,530 |
6 |
2,030 |
5,530 |
| 2 |
430 |
3,130 |
7 |
2,430 |
6,130 |
| 3 |
830 |
3,730 |
8 |
2,830 |
6,730 |
| 4 |
1,230 |
4,330 |
9 |
3,230 |
7,330 |
| 5 |
1,630 |
4,930 |
10 |
3,630 |
9,064 |
Hint: (Draw an estimated line of cost behavior using a scatter diagram offline.)
Complete the below table to calculate the fixed cost and variable cost of sales by using the high-low method. (Round cost per unit to 2 decimal places.)
Question 6:
A jeans maker is designing a new line of jeans called the Slims. The jeans will sell for $295 per pair and cost
(Round your answers to 2 decimal places.)
(1) Compute the contribution margin per pair
(2) Compute the contribution margin ratio
Question 7:
Blanchard Company manufactures a single product that sells for $184 per unit and whose total variable costs are $138 per unit. The company's annual fixed costs are $699,200.
price per unit
total variable costs per unit
annual fixed costs
Prepare a contribution margin income statement for Blanchard Company at the break-even point
| BLANCHARD COMPANY |
| Contribution Margin Income Statement (at Break-Even) |
% of sales |
| Sales |
|
|
|
|
|
| Contribution margin |
|
|
Assume the company's fixed costs increase by $137,000
What amount of sales (in dollars) is needed to break even?
Question 8:
Blanchard Company manufactures a single product that sells for $190 per unit and whose total variable costs are $152 per unit. The company targets an annual after-tax income of $665,000. The company is subject to a 30% income tax rate. Assume that fixed costs remain at $562,400.
(1) Compute the unit sales to earn the target after-tax income.
(2) Compute the dollar sales to earn the target after-tax net income
Question 9:
Nombre Company management predicts $530,000 of variable costs, $830,000 of fixed costs, and a pretax income of $209,500 in the next period. Management also predicts that the contribution margin per unit will be $63.
(1) Compute the total expected dollar sales for next period
(2) Compute the number of units expected to be sold next period