Prepare a revised operating profit report

Assignment Help Financial Accounting
Reference no: EM13534429

The Company X's operating profit report and summary of manufacturing activity presented below. Note that its annual production capacity is 150,000 units, but the business manufactured only 120,000 units during the year. Therefore, it had 20 percent idle capacity (30,000 units not produced ÷ 150,000 units production capacity = 20 percent idle capacity). However, the cost of idle capacity isn't treated as a separate period cost; all the company's fixed manufacturing overhead costs are included in calculating its product cost. Suppose that the business treats the cost of idle capacity as a period cost. Prepare a revised operating profit report and summary of manufacturing activity for the business.

 

Company X

 
 

Per Unit

Totals

Operating Profit Report for Year

   

Sales volume, in Units

 

110,000

Sales Revenue

$1,400.00

$154,000,000

Cost of Goods Sold Expense (see below)

-760

-83,600,000

Gross Margin

$640.00

$70,400,000

Variable Operating Expenses

-300

-33,000,000

Contribution Margin

$340.00

$37,400,000

Fixed Operating Expenses

 

-21,450,000

Operating Profit

 

$15,950,000

Manufacturing Activity Summary for Year

Per Unit

Totals

Annual Production Capacity, in Units

 

150,000

Actual Output, in Units

 

120,000

Raw Materials

$215.00

$25,800,000

Direct Labor

125

15,000,000

Variable Manufacturing Overhead Costs

70

8,400,000

Total Variable Manufacturing Costs

$410.00

$49,200,000

Fixed Manufacturing Overhead Costs

350

42,000,000

Product Cost and Total Manufacturing Costs

$760.00

$91,200,000

Reference no: EM13534429

Questions Cloud

Explain your rationale : Consider the role the U.S. government has taken in the regulation of banks, as well as the history of major banking regulations, and predict the next major regulatory move by the U.S. government. Explain your rationale.
In your search for mutants of your favorite gene : In your search for mutants of "your favorite gene" (yfg) you identify a mutant which you believe to be a transposon insertion. At your disposal you havea point mutant of yfg. How can you distinguish this potential yfg transposondisruption from a n..
The e-activity, critique the dodd-frank act to determine : The e-Activity, critique the Dodd-Frank Act to determine
Consider the total cost and the total revenue : Consider the total cost and the total revenue
Prepare a revised operating profit report : The business treats the cost of idle capacity as a period cost and prepare a revised operating profit report and summary of manufacturing activity for the business.
Insulin is a peptide hormone that : Insulin is a peptide hormone that:(explanation requiredfor points)
Good does canada have a comparative advantage : For which good does Canada have a comparative advantage?
Glucagon stimulates gluconeogenesis because : Glucagon stimulates gluconeogenesis because:(explanationrequired for points)
Determine amount the business has to pay the bank : Assuming quarterly compounding of the quoted 6 percent annual interest rate, determine the amount the business has to pay the bank at the maturity date of the note one year from now.

Reviews

Write a Review

Financial Accounting Questions & Answers

  Analyzing the effects of four alternative inventory methods

Analyzing the Effects of Four Alternative Inventory Methods in a Periodic Inventory System,   Compute the amount of goods available for sale, ending inventory, and cost of goods sold at January 31, 2009, under each of the following inventory costing ..

  Prepare a retained earnings statement for the fiscal year

Prepare a retained earnings statement for the fiscal year ended July 31, 2008.

  Analyze the issues and provide recommendations

Provide an assessment of the accountant's ethical responsibilities in the case situation.

  Merchandise inventory - multiple choice questions1nbspwhen

merchandise inventory - multiple choice questions.1.nbspwhen inventory declines in value below original historical cost

  Are there disclosure requirements in the united states

Are there disclosure requirements in the United States that govern the reporting practices of foreign currency transactions? Provide example

  Match her capital deficiency

Prior to the final distribution of cash,Mary's capital balance was $200,000,Ann's capital balance was $150,000,and Tina had a capital deficiency of $50,000. Assuming Tina contributes cash to match her capital deficiency, Mary should receive?

  Find out the budget for the department assuming that it uses

The department actually completed 5,000 hours of production. Find out the budget for the department assuming that it uses flexible budgeting?

  Find the activity rate for each activity cost pool

Find the activity rate for each activity cost pool. Also compute the amount of overhead cost that would be applied to each product.

  Illustrate what is the minimum transfer price

Top management of PFC International would like the Heating Division to transfer 15,000 heating units to another division within the company at a price of $29. The Heating Division is operating at full capacity. Illustrate what is the minimum transf..

  Provide thru fasb accounting codification

How to Recognized or Disclose in the financial statement. The answer are provide thru FASB accounting codification. If you don't have login, I will provide the web link and the login info.

  How nonaudit services can impair independence

Assess whether or not the Yellow Book rules are more restrictive than the AICPA code of conduct on independence. Explain your answer.

  How much would crow manufacturing total income

Based on Crow Manufacturing's data in the above problem, assume that a transfer price of $110 has been established and that 40,000 units of materials are transferred, with no reduction in the Materials Division's current sales. How much would the ..

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