Reference no: EM131731981

Question 1) The Churu Company manufactures a product that goes through three processing departments. Information relating to activity in the first department during June is given below.

		Percentage Completed
	Units	Materials	Conversion
Work in process, August 1	160,000	65%	45%
Work in process, August 30	130,000	75%	65%

The department started 650,000 units into production during the month and transferred 680,000 completed units to the next department.

Required: Compute the equivalent units of production for the first department for June, assuming that the company uses the weighted-average method of accounting for units and costs.

Question 2) The Fredshire Company, which has only one product, has provided the following data concerning its most recent month of operations.

Selling price	$125
Units in beginning inventory	600
Units produced	3,000
Units sold	3,500
Units in ending inventory	100
Variable costs per unit:
Direct materials	$27
Direct labor	$18
Variable manufacturing overhead	$10
Variable selling and admin	$12
Fixed costs:
Fixed manufacturing overhead	$75,000
Fixed selling and admin	$30,000

Required:

a) What is the unit product cost for the month under variable costing?

b) What is the unit product cost for the month under absorption costing?

c) Prepare an income statement for the month using the variable costing method.

d) Prepare an income statement for the month using the absorption costing method.

Question 3) The following data (in thousands of dollars) have been taken from the accounting records of Devlin Corporation for the just-completed year.

Sales	$920
Purchases of raw materials	$215
Direct labor	$170
Manufacturing overhead	$275
Administrative expenses	$180
Selling expenses	$140
Raw materials inventory, beginning	$100
Raw materials inventory, ending	$65
Work-in-process inventory, beginning	$75
Work-in-process inventory, ending	$35
Finished goods inventory, beginning	$130
Finished goods inventory, ending	$165

Prepare a Schedule of Cost of Goods Manufactured statement in the text box below.

Question 4) A wood manufacturer has supplied the following data.

Tons of wood produced and sold	220,000
Sales revenue	$924,000
Variable manufacturing expense	$297,000
Fixed manufacturing expense	$280,000
Variable selling and admin expense	$165,000
Fixed selling and admin expense	$82,000
Net operating income	$100,000

Required:

a) Calculate the company's unit contribution margin.

b) Calculate the company's contribution margin ratio.

c) If the company increases its unit sales volume by 5% without increasing its fixed expenses, what would the company's net operating income be?