Please show steps for the following questions: 1) The East Company manufactures
ID: 2335648 • Letter: P
Question
Please show steps for the following questions:
1) The East Company manufactures several different products. Unit costs associated with Product ORD105 are as follows:
Direct materials $54
$ 54$54
Direct manufacturing labor 8
88
Variable manufacturing overhead 11
1111
Fixed manufacturing overhead 25
2525
Sales commissions (2% of sales) 5
55
Administrative salaries 12
1212
Total 115
$ 115$115
What is the percentage of the total fixed costs per unit associated with Product ORD105 with respect to total cost?
a. 32%
b. 26%
c. 37%
d. 15%
2) Pederson Company reported the following:
Manufacturing costs $315,000
$ 315 comma 000$315,000
Units manufactured 7,000
7 comma 0007,000
Units sold 6,300 units sold for $115 per unit
6 comma 3006,300
units sold for
$ 115$115
per unit
Beginning inventory 1,750 units
1 comma 7501,750
units
What is the manufacturing cost for the ending finished goods inventory?
a. $31,500
b. $25,200
c. $577,500
d. $110,250
3)The following information pertains to Expert System Corporation:
Beginning workinprocess inventory $15,000
$ 15 comma 000$15,000
Ending workinprocess inventory 24,000
24 comma 00024,000
Beginning finished goods inventory 38,000
38 comma 00038,000
Ending finished goods inventory 30,000
30 comma 00030,000
Cost of goods manufactured 250,000
250 comma 000250,000
Sales 304,000
304 comma 000304,000
What is the gross profit margin earned by the company?
a. $46,000
b. $55,000
c. $62,000
d. $63,000
Direct materials $54
$ 54$54
Direct manufacturing labor 8
88
Variable manufacturing overhead 11
1111
Fixed manufacturing overhead 25
2525
Sales commissions (2% of sales) 5
55
Administrative salaries 12
1212
Total 115
$ 115$115
Explanation / Answer
Solution 1:
Total Fixed cost per unit = Fixed Manufacturing overhead per unit + administrative salaries per unit
= $25 + $12 = $37 per unit
Total cost per unit = $115
Percentage of Total fixed cost per unit to the total cost = $37 / $115 = 32.173% = 32%
Hence option "c" is correct
Solution 2:
Manufacturing cost per unit = Total Manufacturing cost / units manufactured = $315,000 / 7000 = $45 per unit
Ending inventory = Units manufactured + Beginning inventory - units sold = 7000 +1750 - 6300 = 2,450 units
Manufacturing cost for ending inventory = Ending inventory * Manufacturing cost per unit = 2450 *$45 = $110,250
Hence option "d" is correct.
Solution 3:
Cost of goods sold = Cost of goods manufactured + Beginning finished goods inventory - Ending finished goods inventory
= $250,000 + $38,000 - $30,000 = $258,000
Gross profit margin = Sales - Cost of goods sold = $304,000 - $258,000 = $46,000
Hence Option "a" is correct.