Folgers manufactures coffee: Item Total Cost Salaries for Administrative Staff $
ID: 2417664 • Letter: F
Question
Folgers manufactures coffee:
Item
Total Cost
Salaries for Administrative Staff
$264,000
Salary for Factory Manager
14,800
Rent on Factory and Equipment
184,600
Utilities for Factory
40,200
Advertising (fixed)
20,400
Rubber and plastic
448,200
Wages for Assembly Staff
358,000
Total
$1,330,200
a. Identify all costs above as either a product cost (specifically DM, DL or OH) or a period cost (PC).
b. If Folgers had produced 12,000 units, but only sold ¾ of its inventory what amount would it report for inventory?
c. Identify all of their costs as either a variable cost (VC) or a fixed cost (FC) then calculate the variable cost per unit (rounded to the nearest penny) assuming 12,000 units were produced and the total fixed costs. Prepare a CM model assuming all units were sold at $125 each.
Use the contribution margin model to answer each situation below, which is independent of the others and unless specified otherwise, uses the VC and FC data above.
d. Management expects a 20% increase in unit sales. If so, what is the Folgers’ projected net income under this scenario?
e. Folgers is considering using recycled rubber and plastic for their product. If so, its most recent costs for materials would increase by $10 per unit; as a result, Folgers would increase the price by $5 per unit to help offset that cost increase. In addition, management would increase advertising by 50 percent. If those changes are made,Folgers anticipates that unit sales would increase by 15 percent. What is the projected net income under this scenario?
f.Folgers is considering whether it should make upgrades to the factory and equipment; if so, the rent on factory and equipment would increase by 15 percent. Management projects that its production (and sales) volume would increase by 20 percent if the price were lowered by $5 per unit for all units. What is the projected net income under this scenario?
Item
Total Cost
Salaries for Administrative Staff
$264,000
Salary for Factory Manager
14,800
Rent on Factory and Equipment
184,600
Utilities for Factory
40,200
Advertising (fixed)
20,400
Rubber and plastic
448,200
Wages for Assembly Staff
358,000
Total
$1,330,200
Explanation / Answer
Question in Accounting
Folgers manufactures coffee:
Item
Total Cost
Salaries for Administrative Staff
$264,000
Salary for Factory Manager
14,800
Rent on Factory and Equipment
184,600
Utilities for Factory
40,200
Advertising (fixed)
20,400
Rubber and plastic
448,200
Wages for Assembly Staff
358,000
Total
$1,330,200
a. Identify all costs above as either a product cost (specifically DM, DL or OH) or a period cost (PC).
b. If Folgers had produced 12,000 units, but only sold ¾ of its inventory what amount would it report for inventory?
c. Identify all of their costs as either a variable cost (VC) or a fixed cost (FC) then calculate the variable cost per unit (rounded to the nearest penny) assuming 12,000 units were produced and the total fixed costs. Prepare a CM model assuming all units were sold at $125 each.
Use the contribution margin model to answer each situation below, which is independent of the others and unless specified otherwise, uses the VC and FC data above.
d. Management expects a 20% increase in unit sales. If so, what is the Folgers’ projected net income under this scenario?
e. Folgers is considering using recycled rubber and plastic for their product. If so, its most recent costs for materials would increase by $10 per unit; as a result, Folgers would increase the price by $5 per unit to help offset that cost increase. In addition, management would increase advertising by 50 percent. If those changes are made,Folgers anticipates that unit sales would increase by 15 percent. What is the projected net income under this scenario?
f.Folgers is considering whether it should make upgrades to the factory and equipment; if so, the rent on factory and equipment would increase by 15 percent. Management projects that its production (and sales) volume would increase by 20 percent if the price were lowered by $5 per unit for all units. What is the projected net income under this scenario?
a. Identify all costs above as either a product cost (specifically DM, DL or OH) or a period cost (PC).
b. If Folgers had produced 12,000 units, but only sold ¾ of its inventory what amount would it report for inventory?
Identify all of their costs as either a variable cost (VC) or a fixed cost (FC) then calculate the variable cost per unit (rounded to the nearest penny) assuming 12,000 units were produced and the total fixed costs. Prepare a CM model assuming all units were sold at $125 each.
Use the contribution margin model to answer each situation below, which is independent of the others and unless specified otherwise, uses the VC and FC data above.
Variable cost per unit
Question in Accounting
Folgers manufactures coffee:
Item
Total Cost
Salaries for Administrative Staff
$264,000
Salary for Factory Manager
14,800
Rent on Factory and Equipment
184,600
Utilities for Factory
40,200
Advertising (fixed)
20,400
Rubber and plastic
448,200
Wages for Assembly Staff
358,000
Total
$1,330,200
a. Identify all costs above as either a product cost (specifically DM, DL or OH) or a period cost (PC).
b. If Folgers had produced 12,000 units, but only sold ¾ of its inventory what amount would it report for inventory?
c. Identify all of their costs as either a variable cost (VC) or a fixed cost (FC) then calculate the variable cost per unit (rounded to the nearest penny) assuming 12,000 units were produced and the total fixed costs. Prepare a CM model assuming all units were sold at $125 each.
Use the contribution margin model to answer each situation below, which is independent of the others and unless specified otherwise, uses the VC and FC data above.
d. Management expects a 20% increase in unit sales. If so, what is the Folgers’ projected net income under this scenario?
e. Folgers is considering using recycled rubber and plastic for their product. If so, its most recent costs for materials would increase by $10 per unit; as a result, Folgers would increase the price by $5 per unit to help offset that cost increase. In addition, management would increase advertising by 50 percent. If those changes are made,Folgers anticipates that unit sales would increase by 15 percent. What is the projected net income under this scenario?
f.Folgers is considering whether it should make upgrades to the factory and equipment; if so, the rent on factory and equipment would increase by 15 percent. Management projects that its production (and sales) volume would increase by 20 percent if the price were lowered by $5 per unit for all units. What is the projected net income under this scenario?
a. Identify all costs above as either a product cost (specifically DM, DL or OH) or a period cost (PC).
Item Total Cost Salaries for Administrative Staff $264,000 PC Salary for Factory Manager $14,800 OH Rent on Factory and Equipment $184,600 OH Utilities for Factory $40,200 OH Advertising (fixed) $20,400 PC Rubber and plastic $448,200 DM Wages for Assembly Staff $358,000 DLb. If Folgers had produced 12,000 units, but only sold ¾ of its inventory what amount would it report for inventory?
Ending Inventory = 12,000 units x(1- 3/4 ) 3000 unitsIdentify all of their costs as either a variable cost (VC) or a fixed cost (FC) then calculate the variable cost per unit (rounded to the nearest penny) assuming 12,000 units were produced and the total fixed costs. Prepare a CM model assuming all units were sold at $125 each.
Use the contribution margin model to answer each situation below, which is independent of the others and unless specified otherwise, uses the VC and FC data above.
Variable cost per unit
Salaries for Administrative Staff $264,000 PC Salary for Factory Manager $14,800 Fixed Rent on Factory and Equipment $184,600 Fixed Utilities for Factory $40,200 Fixed Advertising (fixed) $20,400 Fixed Rubber and plastic $448,200 VC $37.35 Wages for Assembly Staff $358,000 VC $29.83 Income Statement Sales ($125 x 12000 units) $1,500,000.00 Less: Variable Cost Rubber and plastic ($448,200) Wages for Assembly Staff ($358,000) Contribution Margin $693,800.00 Less: Fixed Costs Salary for Factory Manager ($14,800) Rent on Factory and Equipment ($184,600) Utilities for Factory ($40,200) Advertising (fixed) ($20,400) Net Income $433,800.00