Acc406 Final Exam
Question # 1 (4 marks)
Reardon Inc. publishes accounting textbooks and expects to sell 6,000 during the coming year. The average selling price per textbook is $75. Projected costs for 6,000 textbooks are as follows:
Direct Materials $94,500
Direct Labour $45,000
Variable Manufacturing Overhead $48,000
Fixed Manufacturing Overhead $96,000 *
Fixed Selling and Administrative $42,500
Variable Selling and Administrative $25,000
* Total Fixed Manufacturing Overhead increases to $128,000 for production levels over 7500 textbooks
Required:
1) Determine total variable manufacturing costs to produce one textbook. 2) Determine total manufacturing costs to produce 7,000 textbooks. 3) What is the total fixed manufacturing costs to produce 6,000 textbooks. 4) What is the total manufacturing costs to produce 9,000 textbooks.
Question # 2 (8 marks)
Horizon Products Incorporated produces and sells yoga related training products, how to videotapes, a basic equipment set, and an advanced yoga handbook.
Last year Horizon sold 10,000 videos, 5,000 equipment sets, and 2,000 handbooks.
Information on the three products is as follows:
Videotape Equipment Set Handbook
Price (per unit) $12 $15 $9
Variable cost (unit) 4 6 6.50
Total fixed cost $69,420
Required:
1) What is the sales mix of videotapes, equipment sets, and handbooks? What is the package contribution margin? 2) Compute the breakeven quantity of each product. 3) Prepare an Income Statement for Horizon for the previous year. 4) What is the overall contribution margin ratio? What is the overall breakeven sales revenue? 5) Compute the Margin of Safety for the previous year.
Question # 3 (9 marks)
Part # 1 (4 marks)
Kyle Fricker Inc. has set the following standards for one unit of beer production.
Direct Material
Reardon Inc. publishes accounting textbooks and expects to sell 6,000 during the coming year. The average selling price per textbook is $75. Projected costs for 6,000 textbooks are as follows:
Direct Materials $94,500
Direct Labour $45,000
Variable Manufacturing Overhead $48,000
Fixed Manufacturing Overhead $96,000 *
Fixed Selling and Administrative $42,500
Variable Selling and Administrative $25,000
* Total Fixed Manufacturing Overhead increases to $128,000 for production levels over 7500 textbooks
Required:
1) Determine total variable manufacturing costs to produce one textbook. 2) Determine total manufacturing costs to produce 7,000 textbooks. 3) What is the total fixed manufacturing costs to produce 6,000 textbooks. 4) What is the total manufacturing costs to produce 9,000 textbooks.
Question # 2 (8 marks)
Horizon Products Incorporated produces and sells yoga related training products, how to videotapes, a basic equipment set, and an advanced yoga handbook.
Last year Horizon sold 10,000 videos, 5,000 equipment sets, and 2,000 handbooks.
Information on the three products is as follows:
Videotape Equipment Set Handbook
Price (per unit) $12 $15 $9
Variable cost (unit) 4 6 6.50
Total fixed cost $69,420
Required:
1) What is the sales mix of videotapes, equipment sets, and handbooks? What is the package contribution margin? 2) Compute the breakeven quantity of each product. 3) Prepare an Income Statement for Horizon for the previous year. 4) What is the overall contribution margin ratio? What is the overall breakeven sales revenue? 5) Compute the Margin of Safety for the previous year.
Question # 3 (9 marks)
Part # 1 (4 marks)
Kyle Fricker Inc. has set the following standards for one unit of beer production.
Direct Material