Compute product line profits-loss for the standard model

Assignment Help Accounting Basics
Reference no: EM131785207

Problem

Kima Company manufactures and sells two models of a home appliance. The Standard model is a basic appliance with mostly manual features, while the Galaxy model is highly automated. The appliances are produced to order, and there are no inventories at the end of the year.

The cost accounting system at Kima allocates overhead to products based on direct labor cost. Overhead in year 1, which just ended, was $3,120,000. Other data for year 1 for the two products follow:

 

Standard Model

Galaxy Model

 

(20,000 units)

(3,000 units)

Sales revenue

$

6,000,000


$

2,700,000


Direct materials


2,400,000



300,000


Direct labor


1,600,000



480,000


Required:

a. Compute product line profits/loss for the Standard model and the Galaxy model for year 1. (Negative amounts should be indicated by a minus sign.)

b. A study of overhead shows that without the Standard model, overhead would fall to $2,250,000. Assume all other revenues and costs would remain the same for the Galaxy model in year 2. Compute product line profits/loss for the Galaxy model in year 2 assuming the Standard model was not produced or sold. (Negative amounts should be indicated by a minus sign.)

Reference no: EM131785207

Questions Cloud

What impairment loss would jjw corporation : What impairment loss would JJW Corporation record on its books if it is a publicly traded enterprise?
Find the total amount paid over the life of the loan : A woman buys an apartment house for $1,250,000 by making a down payment of $250,000 and amortizing the rest of the debt with semiannual payments.
Compute predetermined overhead rate based on machine hours : Singleton Company is trying to determine a predetermined manufacturing overhead. Compute predetermined overhead rate based on Machine hours
Outstanding debt and equity information : DLC Ltd. has calculated its basic EPS to be $5.50 at the end of Year 4 and has the following outstanding debt and equity information.
Compute product line profits-loss for the standard model : Compute product line profits/loss for the Standard model and the Galaxy model for year 1. (Negative amounts should be indicated by a minus sign.)
Consumer characteristics that can influence perception : Consumer characteristics that can influence perception include ______________.
Reflected on tree statement of financial position : On December 31, Year 1, how would these options be reflected on Tree's statement of financial position?
Find the combination of the small and large toys : Find the combination of the small and large toys that maximizes your revenue dollars.
Problem on the parcel of land : A developer wants to buy a certain parcel of land. The developer feels she can afford payments of $44,000 each half-year for the next 7 years.

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd