Grading Summary These are the automatically computed results of your exam. Grades for essay questions, and comments from your instructor, are in the "Details" section below. | Date Taken: | 11/26/2012 | Time Spent: | 1 h , 53 min , 23 secs | Points Received: | 187.50 / 270 (69.4%) | | Question Type: | # Of Questions: | # Correct: | Essay | 6 | N/A | | |
Grade Details - All Questions |
1. | Question : | Schlag Inc. expects its sales in January to be $111,000. The company's contribution margin ratio is 65% and its fixed monthly expenses are $64,000.
Required:
Estimate the company's net operating income for January, assuming that the fixed monthly expenses do not change. Show your work! | | | Student Answer: | | Construct the Variable Costing Income Statement Year 1 Sales $111,000 Variable expenses: Variable cost of goods sold Variable selling and administrative expenses - 0 Contribution margin (.65*111000) - 72150 Fixed expenses: Fixed manufacturing overhead Fixed selling and administrative expenses - $64,000 Net operating income = $8,150 | | | | Points Received: | 45 of 45 | | Comments: | | | | 2. | Question : | Babb Company is a manufacturing firm that uses job-order costing. The company's inventory balances were as follows at the beginning and end of the year:
Beginning inventory Ending inventory Raw materials $11,000 $15,000 Work in process $32,000 $14,000 Finished goods $108,000 $123,000
The company applies overhead to jobs using a predetermined overhead rate based on machine-hours. At the beginning of the year, the company estimated that it would work 17,000 machine-hours and incur $272,000 in manufacturing overhead cost. The following transactions were recorded for the year:
·Raw materials were purchased, $416,000.
·Raw materials were requisitioned for