Franklin Street Manufacturing Franklin Street Manufacturing has the following co
ID: 2594137 • Letter: F
Question
Franklin Street Manufacturing Franklin Street Manufacturing has the following cost information available for 2011 Direct materials used Direct labor costs Factory overhead Marketing expenses $10,000 25,000 20,000 4,000 6,000 20,000 units were produced during the year out of which 19,000 units were sold for $io 56. Refer to the Franklin Street Manufacturing information above. What is cost of goods sold for 2011? $55,000 b. $52,250 c $61,750 d $65,000 57. Refer to the Franklin Street Manufacturing information above. Whast is net operating income for 2011? Ignore taxes) a $127,750 b. $137.750 c. $125,000 d. $128,250 Cardinal Cleaners ardinal Cleaners documented the gallons of cleaning solvent it usod as well as total overhead costs for the past five months as follows: Number of gallons 160 150 155 175 170 Total overhcad costs $6,500 6,100 6,700 7,000 6,800 Juhy Angust Novembe 58. Refer to the Candinal Cleaners information above. Using the high/low imethod, wbat is the variable cost pet unit? $25.00 b. $0.03 c. $900.00 d. $36.00 59. Refer to the Cardinal Cleaners information above. Using the high/low method, what is equation to predict total overhead costs? Y-$700+536x e Y $175+541x d. Y-$100+$40Explanation / Answer
56.cost of goods sold = opening stock + purchases + direct cost(operating)-closing stock.
Cost of goods sold = direct material + direct labour + factory overhead.
= $10000+25000+20000
=$50000
Option (a).
57.
Net operating income= Net operating income (NOI) is simply the annual income generated by an income-producing property after taking into account all income collected from operations, and deducting all expenses incurred from operations.
Calculation of net operating income:
Sales = 19000*10. = $190000
Less: operating expenses
Direct material 10000
Direct labour. 25000
Factory overhead. 20000
Marketing expense. 4000
Adminstrative expense. 6000
Total operating expenses. $65000
Net Operating income = $190000-65000= $125000.
Answer: option (c)
Q.no 58.
Calculation of variable cost under high low method:
Variable cost per unit = y2-y1/x2-x1
Where,
y2 is the total cost at highest level of activity= October,7000
y1 is the total cost at lowest level of activity= August,6100
x2 are the number of units/labor hours etc. at highest level of activity;175 and
x1 are the number of units/labor hours etc. at lowest level of activity=150
VC per unit = 7000-6100/175-150
= $900/25= 36 per unit variable cost.
Ans.option(d).
Q.no 59
Calculation of fixed cost
High activity 175 gallon s total overhead cost = 7000
Variable cost = 36
Fixed cost = $7000 - 175*36 = $700
Overhead equation (y) =$700+$36x
Option (a) is correct answer
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