Prepare a Contribution Format income statement for November with costs organized by behaviour. Show costs and revenues on both a total and a per unit basis down through contribution margin.

Accounting by Geoffrey

ACCG70011

Finance and Managerial Accounting

 

Assignment #2

 

Chapter 02

  1. Using the information below, prepare a Schedule of Cost of Goods Manufactured. – 8 marks

 

Purchases of raw materials $95,000.00
Raw materials inventory, beginning $9,000.00
Raw materials inventory, ending $16,000.00
Depreciation, factory $45,000.00
Insurance, factory $7,500.00
Direct Labour $68,000.00
Maintenance factory $33,000.00
Administrative Expenses $65,000.00
Sales $472,000.00
Utilities, factory $29,000.00
Supplies, factory $3,000.00
Selling expenses $90,000.00
Indirect labour $72,000.00
Work in Process inventory, beginning $5,000.00
Work in Process inventory, ending $26,000.00
Finished Goods inventory, beginning $12,000.00
Finished Goods inventory, ending $45,000.00

 

Chapter 03

House of Pianos, Inc. purchases pianos from a well-known manufacturer and sells them at the retail level. The pianos sell, on the average, for $2,600 each. The average cost of a piano from the manufacturer is $1,750.

House of Pianos, Inc. has always kept careful records of its costs. The costs that the company incurs in a typical month are presented below:

 

Costs   Cost Formula
Selling:    
Advertising $1,700.00 per month
Delivery of Pianos $80.00 per piano sold
Sales Salaries and Commissions $4,500.00 per month, plus 3% of sales
Utilities $800.00 per month
Depreciation of Sales Facilities $4,600.00 per month
Administrative:    
Executive Salaries $16,500.00 per month
Depreciation of Office Equipment $700.00 per month
Clerical $2,950.00 per month, plus $50 per piano sold
Insurance $750.00 per month

 

During November, the company sold and delivered 95 pianos.

  1. Prepare a Contribution Format income statement for November with costs organized by behaviour. Show costs and revenues on both a total and a per unit basis down through contribution margin. – 12 marks

 

 

  1. For the information below, use the high-low method to determine the mixed cost equation. You must use both data for the high point, and the low point. You must show the equation (for both the high point and low point – meaning, you must to have TWO equations), not just what the variable cost is. – 4 marks
Units Cost
26 2400
40 3100
28 2600
36 3000
24 2300

 

 

 

Chapter 04

 

“You Rang?” manufactures and sells boomerangs. The company’s contribution format income statement for the month of September is given below. The company is looking to make a profit of $7000 for the month.

  Total Per Unit
Sales (800 units) $16,000 $20.00
Less Variable Expenses $9,600 $12.00
Contribution Margin $6,400 $8.00
Less Fixed Expenses $3,400  
Operating Income $3,000  

 

Compute the following:

  1. The Contribution Margin Ratio for “You Rang?” – 1 Mark
  2. The company’s break-even point in both units and sales dollars. – 3 Marks
  3. The Target Operating Profit for “You Rang?”  in both units and sales dollars. – 3 Marks
  4. The company’s Margin of Safety expressed in units, sales dollars, and as a percentage. – 3 Marks

 

 

Make sure to show ALL work! A majority of the marks are based on the work, not the final answer. To receive full credit for each question, you must show your work, and round your final answers to 2 decimal points correctly.

 

Assignment is due October 25th, 2022 at 11:59PM – Midnight as a Microsoft Word or Excel file in the drop box located on SLATE only. Late assignments are subject to a 10% per day penalty.