6. Minist Corporation sells a single produet for $15 per unit. Last year, the co
ID: 2565134 • Letter: 6
Question
6. Minist Corporation sells a single produet for $15 per unit. Last year, the company's sales revenue was $225,000 and its net operating income was $18,000. If fixed expenses totaled 572,000 for the year, the break-even point in unit sales was (choose the closest answer) 5700000 S1 18,000 140,000 563,000 Labor Cost Matcrials Puchased Selling Expense Administrative Expense Procetsring Overhcad Applied to Work in Actual Manufacturing Overhcad Cost 590,000 580,000 Beginning of Year End of Year $15,000 55,000 $7,000 Raw Materials Work in Process Finished Goods 20,000 7 Additional information: For the year, the cost of goods manufactured totaled S275the unadj cost of goods sold totaled $260,000. The company's overapplied or underapplied overhead is closed entirely to Cost of Goods Sold. 7. How much was the Company's Work in Process inventory balance at the beginning of the year? A. $2.000Explanation / Answer
6)contribution =Net operating income+fixed cost
= 18000+72000
= 90000
unit sold :225000/15= 15000 units
contribution per unit = 90000/15000=$ 6 per unit
Break even point =Fixed cost/contribution per unit
= 72000/6
= 12000 units
7)Ram material used =Beginning+purchase-ending raw material
=7000+118000-15000
= 110000
Total manufacturing cost =Raw material used+direct labor cost+overhead applied
=110000+70000+90000
= 270000
Cost of goods manufactured =Beginning WIP+Total manufacturing cost-endi gWIP
275000= Beginning WIP+270000-5000
Beginning WIP = 275000-270000+5000
= $ 10000
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