Score: 0 of 25 pts 8 of 8 (6 complete) HW Score: 50%, 50 of 100 pts P9-40 (simil

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Score: 0 of 25 pts 8 of 8 (6 complete) HW Score: 50%, 50 of 100 pts P9-40 (similar to) Question Help CJLL Company manufactures a specialized hoverboard. CJLL began 2017 with an inventory of 260 hoverboards. During the year, it produced 900 boards and sold 1,010 for $740 each. Fixed production costs were $184,800, and variable production costs were $340 per unit. Fixed advertising, marketing, and other general and inventory cost Read the requirements Requirement 1. Prepare an incon Complete the top half of the incorm est administrative expenses were $113,000, and variable shipping costs were $16 per board. Assume that the cost of each unit in beginning inventory is equal to 2017 Requirements 1. Prepare an income statement assuming CJLL uses variable costing 2. Prepare an income statement assuming CJLL uses absorption costing. CJLL 3. Compute the breakeven point in units sold assuming CJLL uses the following: 4. Provide proof of your preceding breakeven calculations. uses a denominator level of 840 units. Production-volume variances are written off to cost of goods sold. a. Variable costing b. Absorption costing (Production 900 boards) 5. Assume that $35,000 of fixed administrative costs were reclassified as fixed production costs. Would this reclassification affect breakeven point using variable costing? What if absorption costing were used? Explain. 6. The company that supplies CJLL with its specialized impact-resistant material has announced a price increase of $17 for each board. What effect would this have on the breakeven points previously calculated? Choose from any list or enter a Print Done 11 remaining Check Answer urse (Cost Accounting Fall 2017) is based on Horngren Cost Accounting, 16e

Explanation / Answer

1 Income statement variable costing Unit product cost 340 Units manufactured 900 Units sold 1,010 Income statement Sales revenue 747400 Less Variable expense Variable cost of goods sold 343400 Variable selling and admin expense$40 16160 Total variable expense 359560 Contribution margin 387840 Less Fixed cost Fixed manufacturing expense 184800 Fixed Admin expense 113000 Total fixed expenses 297800 Net operating income 90040 2 Income statement absorption costing Variable manufacturing overhead 340 Fixed manufacturing (184800/840) 220 Total product cost 560 Units sold 1,010 Income statement 1st year Sales revenue 747400 cost of goods sold Beginning inventory 145600 cost of goods manufactured 504000 Add Goods available for sale 649600 Ending inventory 84000 Less Cost of goods sold 565600 Gross profit 181800 Selling and admin expenses Less Variable selling and admin expense 16160 Fixed Admin expense 113000 Total Selling and admin expenses 129160 Net operating income 52640

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