Juicy Lemonade Company The Juicy Lemonade Company manufactures premium flavored

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Juicy Lemonade Company

The Juicy Lemonade Company manufactures premium flavored organic lemonade. Management is ready to close the books for the end of the first quarter in 2015 and your supervisor has presented you with the following information.

Total sales in gallons of flavored lemonade for January 2015 through March 2015 are as follows:

January14,000

February15,000

March17,000

Each gallon of lemonade is packaged in eight 16 ounce bottles and sold in a case that sells for $15.00 per case.The company produced 47,500 units during the first quarter of 2015.

The company’s Variable Costs include the following

Direct Materials of $1.50 per gallon

Direct Labor of $__2__ per gallon (Each gallon of lemonade requires 15 minutes of direct labor time and the wage rate is $8.00 per hour)

Variable MOH $__1.50___per gallon (The variable overhead rate is $2.00 per machine hour and processing one gallon of lemonade takes 45 minutes of machine time)

Variable Selling and Administrative costs of $1.50 per gallon

The company’s Fixed Costs for the quarter include the following:

Manufacturing Overhead$47,500

Selling and Administrative$28,900

The company’s fixed manufacturing overhead per gallon is $______. (The Fixed Manufacturing Overhead rate is based on Fixed Costs for the quarter and the units produced for the quarter.)

The company’s manufacturing overhead is applied based on the number of gallons produced using the Variable Manufacturing Overhead Rate per gallon calculated in ‘b’ and the Fixed Manufacturing Overhead Rate per gallon calculated in ‘c’.

Raw Materials Inventory consists entirely of direct materials and, at the beginning of the year, consists of 500 units of direct material at a cost of $1.50 per unit. The company purchased 48,000 units of direct material at a cost of $1.50 per unit. Each gallon of lemonade requires one unit of direct materials.

Beginning Work in process inventory consists of 700 gallons of partially processed lemonade. All raw materials are added at the beginning of the production process and these partially completed units are 60% complete with respect to conversion costs. Ending work in process consists of 800 gallons of partially processed lemonade that are 50% complete with respect to conversion costs. The company completed and transferred out 47,500 units this quarter.

The beginning work in process and current period costs are as follows:

Beginning WIP

Direct Materials$1,050

Conversion Costs$1,890

Current period Costs

Direct Materials$71,400

Conversion Costs$213,660

There are 300 gallons of lemonade in Finished Goods Inventory at the beginning of the year carried at a cost of $6.00. There are 1,800 gallons in ending Finished Goods Inventory carried at a cost of $6.00 per unit.

i need answers for 1 and 2 required answers please help me for solve that problem

You are required to prepare all of the following:

1 .Schedule of Cost of Goods Manufactured and a Schedule of Cost of Goods Sold. (50 points)

2.Gross Margin and Contribution Margin Income Statements. (50 points)

Explanation / Answer

Closing Stock = 47500 - (14000+15000+17000) = 1500 Gallons

Schedule of Cost of goods manufactured and cost of goods sold

2.

Gross Margin Income Statement

Contribution Margin Income Satement

$ Cost of goods Manufactured: Direct materials (1.5*57500) 86250 Direct Labor (2*57500) 115000 Variable manufacturing overheads (1.5*57500) 86250 Fixed manufacturing overheads 47500 Cost of goods manufactured 335000 Less: Closing Stock (1500*335000/47500) 10579 324421 Add: Variable selling and administrative overheads(1.5*46000) 69000          FIxed selling and administrative overheads 28900 Cost of goods sold 422321

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