For each of the following costs, identify whether the item is:

For each of the following costs, identify whether the item is:

A variable or fixed cost?
Direct or indirect cost?
Controllable or uncontrollable cost?

For example: Plant Utilities would be a variable, indirect, and controllable cost.

Not all items will fit into each category. Items that do not fit a category should be labeled as not applicable.

Raw materials.
Staples used to secure packed boxes of the product.
Plant janitor’s wages.
Order processing clerk’s wages.
Advertising expenses.
Production worker’s wages.
Production supervisor’s salaries.
Sales force commissions.
Maintenance supplies used.
President’s salary.
Electricity cost for the office building.
Real estate taxes for the plant.
Production-run setup costs.
Depreciation of plant equipment.
Outbound shipping costs.

Use a table format to complete this assignment.

Click here for the solution: For each of the following costs, identify whether the item is:

For supply item ABC, Andrews Company has been ordering 125 units based on the recommendation of the salesperson who calls on the company monthly

For supply item ABC, Andrews Company has been ordering 125 units based on the recommendation of the salesperson who calls on the company monthly. A new purchasing agent has been hired by the company who wants to start using the economic-order-quantity method and its supporting decision elements. She has gathered the following information:

Annual demand in units 250
Days used per year 250
Lead time, in days 10
Ordering costs $100
Annual unit carrying costs $20

Determine the EOQ, average inventory, orders per year, average daily demand, reorder point, annual ordering costs, and annual carrying costs (17 points)

Click here for the solution: For supply item ABC, Andrews Company has been ordering 125 units based on the recommendation of the salesperson who calls on the company monthly

The units of an item available for sale during the year were as follows

Ex 6-8 The units of an item available for sale during the year were as follows:

Jan 1 Inventory 27 units at $120
Feb 17 Purchase 54 units at $138
July 21 Purchase 63 units at $156
Nov 23 Purchase 36 units at $165

There are 50 units of the item in the physical inventory at December 31. The periodic inventory system is used.

Determine the inventory cost by (a) the first-in, first-out method, (b) the last-in, first-out method, and (c) the average cost method.

Click here for the solution: The units of an item available for sale during the year were as follows

Certain item descriptions and amounts are missing from the monthly schedule of cost of goods manufactured and the income statement of Pinta Manufacturing Company

P16-32B Certain item descriptions and amounts are missing from the monthly schedule of cost of goods manufactured and the income statement of Pinta Manufacturing Company.

Requirement

1. Fill in the missing words (___) and amounts (X).

Click here for the solution: Certain item descriptions and amounts are missing from the monthly schedule of cost of goods manufactured and the income statement of Pinta Manufacturing Company

LaGreca Company uses the lower-of-cost-or-market method, on an individual-item basis, in pricing its inventory items

E9-6 (Lower-of-Cost-or-Market—Error Effect) LaGreca Company uses the lower-of-cost-or-market method, on an individual-item basis, in pricing its inventory items. The inventory at December 31, 2010, included product X. Relevant per-unit data for product X appear below.

Estimated selling price $50
Cost 40
Replacement cost 38
Estimated selling expense 14
Normal profit 9

There were 1,000 units of product X on hand at December 31, 2010. Product X was incorrectly valued at $38 per unit for reporting purposes. All 1,000 units were sold in 2011.

Instructions
Compute the effect of this error on net income for 2010 and the effect on net income for 2011, and indicate the direction of the misstatement for each year.

Click here for the solution: LaGreca Company uses the lower-of-cost-or-market method, on an individual-item basis, in pricing its inventory items

a. What is the difference between budget lapsing and line-item budgets?

P 6–4 Budget Lapsing versus Line-Item Budgets
a. What is the difference between budget lapsing and line-item budgets?
b. What types of organizations would you expect to use budget lapsing?
c. What types of organizations would you expect to use line-item budgets?

Click here for the solution: a. What is the difference between budget lapsing and line-item budgets?