Advance products inc has just organized a new division to

Assignment Help Accounting Basics

Reference no: EM13569972

Advance Products, Inc. has just organized a new division to manufacture and sell specially designed tables using select hardwoods for personal computers. Advance Products, Inc. has just organized a new division to manufacture and sell specially designed tables using select hardwoods for personal computers. The divisions monthly costs are shown the schedule below: Manufacturing costs: Variable costs per unit: Direct materials $86 Variable manufacturing overhead $4 Fixed manufacturing overhead $240,000 Selling and administrative costs: Variable 15% of sales Fixed $160,000 Advance Products regards all of its workers as full-time employees and the company has a longer standing no-layoff policy. Furthermore, production is highly automated. Accordingly, the company includes its labor costs in its fixed manufacturing overhead. The tables sell for $250 each. During the first month of operations, the following activity was recorded: Units produced 4,000 Units sold 3,200.

1. Compute the unit product cost under: a. Absorption costing b. Variable costing

2. Prepare an income statement for the month using absorption costing.

3. Prepare a contribution format income statement for the month using variable costing.

4. Assume that the company must obtain additional financing. As a member of top management, which of the statements that you have prepared in and above, would you prefer to take with you as you negotiate with that bank? Why? 5. Reconcile the absorption costing and variable costing net operating income figures in (2) and (3) above.

Reference no: EM13569972

Questions Cloud

How will a high trade deficit affect the value of a nations : how will a high trade deficit affect the value of a nations currency?if the dollar depreciates and the euro

Lunn company makes and sells lawn mowers for which it : lunn company makes and sells lawn mowers for which it currently makes the engines. it has an opportunity to purchase

Divedend yeild at the market close on february 19 2010 : divedend yeild at the market close on february 19 2010 mcdonalds corporation has a closing stock price of 64.74. in

Consider the following scenario the organization that you : consider the following scenario the organization that you work for has been thinking about implementing one of the

Advance products inc has just organized a new division to : advance products inc. has just organized a new division to manufacture and sell specially designed tables using select

Whether home depot did better or worse than lowes for both : a. format of paper the paper needs to be typed. hand-written paper will not be accepted. other requirements are as

Boston company completed the following transactions use a 9 : boston company completed the following transactions use a 9 percent annual interest rate for all transactions a.

Read from stretched to strengthened this is the ibm chief : read from stretched to strengthened this is the ibm chief marketing officer study which was conducted in 2011. the

1borrowed 540000 in jan 2014 made 12 monthly payments : 1.borrowed 540000 in jan 2014 made 12 monthly payments during the year reducing the balance of the loan by 40628. 2.

User Account

All Pages