Reference no: EM13845198

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