1. Ingram Co. manufactures office furniture. During the most productive month of
ID: 2454393 • Letter: 1
Question
1. Ingram Co. manufactures office furniture. During the most productive month of the year, 3,391 desks were manufactured at a total cost of $84,604. In its slowest month, the company made 1,142 desks at a cost of $39,477. Using the high-low method of cost estimation determine total fixed costs are.
Select the correct answer.
A. $16,562
B. $45,127
C. $84,604
D. $39,477
2. Department G had 3,697 units, one-third completed at the beginning of the period, 13,057 units were completed during the period, 1,626 units were one-fifth completed at the end of the period, and the following manufacturing costs were debited to the departmental work in process account during the period:
Work in process, beginning of period
$31,013
Costs added during period:
Direct materials
$129,087
Direct labor
$86,058
Factory overhead
$28,686
Assuming that all direct materials are placed in process at the beginning of production and that the first-in, first-out method of inventory costing is used, what is the total cost of the departmental work in process inventory at the end of the period?
Select the correct answer.
A. $28,686
B. $22,177
C. $129,087
D. $12,150
3. The Collins Corporation just started business in January of 2012. They had no beginning inventories. During 2012 they manufactured 11,286 units of product, and sold 8,921 units. The selling price of each unit was $21. Variable manufacturing costs were $3 per unit, and variable selling and administrative costs were $3 per unit. Fixed manufacturing costs were $29,341 and fixed selling and administrative costs were $8,375.
What would be the Collins Corporations Net income for 2012 using direct costing?
Select the correct answer.
A. $102,247
B. $149,625
C. $96,099
D. $136,091
A. $16,562
B. $45,127
C. $84,604
D. $39,477
Explanation / Answer
1) Variable cost per desk =(Total cost for highest units - Total cost for lower units)/ Highest unit - lowest unit
($84604-$39477) / (3391-1142)
= $20.06536
Total variable cost of 3391 desk = 3391*20.06536
= $68042
Total cost for 3391 desk = $ 84604
Fixed cost = $84604 - 68042
= $ 16562
2) $ 22177
3) Units Sold = 8921 units
Revenue = $ 187341
Less: variable manufacturing cost = $ 26763
Less: Fixed Manufacturing cost = $ 29341
Less: Variable selling cost = $ 26763
Less: Fixed selling cost = $ 8375
net income = $ 96099
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