Whitman Corporation, a merchandising company, reported sales of 12,100 units for May at a selling

Whitman Corporation, a merchandising company, reported sales of 12,100 units for May at a selling price of $714 per unit. The cost of goods sold (all variable) was $448 per unit and the variable selling expense was $63 per unit. The total fixed selling expense was $163,800. The variable administrative expense was $28 per unit and the total fixed administrative expense was $376,100.

Required:
a.	Prepare a contribution format income statement for May. (Input all amounts as positive values. Omit the "$" sign in your response.)

Whitman Corporation Income Statement
Sales		$
Variable expenses:
Cost of goods sold	$
Variable selling expense
Variable administrative expense
Contribution margin
Fixed expenses:
Fixed selling expense
Fixed administrative expense
Net operating income (loss)		$

b.	Prepare a traditional format income statement for May. (Input all amounts as positive values. Omit the "$" sign in your response.)

                                        

Whitman Corporation Income Statement
Sales		$
Cost of goods sold
Gross margin
Operating expenses:
Selling expense	$
Administrative expense
Net operating income (loss)		$

Explanation: a.

Sales (12,100 units × $714 per unit) = $8,639,400

Cost of goods sold (12,100 units × $448 per unit) = $5,420,800

Variable selling expense (12,100 units × $63 per unit) = $762,300

Variable administrative expense (12,100 units × $28 per unit) = $338,800

b.

Sales (12,100 units × $714 per unit) = $8,639,400

Cost of goods sold (12,100 units × $448 per unit) = $5,420,800

Selling expense ((12,100 units × $63 per unit) + $163,800) = $926,100

Administrative expense ((12,100 units × $28 per unit) + $376,100) = $714,900

Corio Corporation reports that at an activity level of 4,800 units, its total variable cost is $328,224 and its total fixed cost is $128,919.

Corio Corporation reports that at an activity level of 4,800 units, its total variable cost is $328,224 and its total fixed cost is $128,919.

Required:

For the activity level of 4,900 units, compute: (a) the total variable cost; (b) the total fixed cost; (c) the total cost; (d) the average variable cost per unit; (e) the average fixed cost per unit; and (f) the average total cost per unit. Assume that this activity level is within the relevant range. (Round your "Average cost" to 2 decimal places and final answers to the nearest dollar amount. Omit the "$" sign in your response.)

(a)	Total variable cost	$
(b)	Total fixed cost	$
(c)	Total cost	$
(d)	Average variable cost		per unit
(e)	Average fixed cost		per unit
(f)	Average total cost		per unit

Explanation: Variable cost = $328,224 ÷ 4,800 units = $68.38 per unit

Activity level	$	4,900
Total cost:
Variable cost (a) [4,900 units × $68.38 per unit]		335,062
Fixed cost (b)		128,919
Total (c)	$	463,981
Cost per unit:
Variable cost (d)		68.38
Fixed cost (e) [$128,919 ÷ 4,900 units]		26.31
Total (f)		94.69

In July, one of the processing departments at Wrightsel Corporation had beginning work in process inventory of $33,000 and ending work in process inventory of $23,000. During the month, $233,000 of costs were added to production and the cost of units transferred out from the department was $243,000.

In July, one of the processing departments at Wrightsel Corporation had beginning work in process inventory of $33,000 and ending work in process inventory of $23,000. During the month, $233,000 of costs were added to production and the cost of units transferred out from the department was $243,000.

Required:

Construct a cost reconciliation report for the department for the month of July. (Omit the "$" sign in your response.)

               

Cost Reconciliation
Costs to be accounted for:
Cost of beginning work in process inventory	$
Costs added to production during the month
Total cost to be accounted for	$
Costs accounted for as follows:
Cost of ending work in process inventory	$
Cost of units transferred out
Total cost accounted for	$

Yoke Corporation has provided the following data from its activity-based costing accounting system:

Yoke Corporation has provided the following data from its activity-based costing accounting system:

Supervisory wages	$	86,200
Factory Utilities	$	296,000

Distribution of Resource Consumption across Activity Cost Pools:

Activity Cost Pools	Batch set-ups		Unit Processing		Other		Total
Supervisory wages	62	%	37	%	1	%	100	%
Factory Utilities	32	%	64	%	4	%	100	%

The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs that are not assigned to products.

Required:

a.	Determine the total amount of supervisory wages and factory utilities costs that would be allocated to the unit Processing activity cost pool. (Omit the "$" sign in your response.)

Total amount

$

b.	Determine the total amount of supervisory wages and factory utilities costs that would be allocated to the Other cost pool. (Omit the "$" sign in your response.)

Total amount

$

Explanation:

a.

Supervisory wages (37% × $86,200)	$	31,894
Factory utilities (64% × $296,000)		189,440
Total	$	221,334

b.

Supervisory wages (1% × $86,200)	$	862
Factory utilities (4% × $296,000)		11,840
Total	$	12,702

Hugle Corporation's activity-based costing system has three activity cost pools-Machining, Setting Up, and Other. The company's overhead costs have already been allocated to these cost pools as follows:

Hugle Corporation's activity-based costing system has three activity cost pools-Machining, Setting Up, and Other. The company's overhead costs have already been allocated to these cost pools as follows:

Machining	$	72,798
Setting up	$	119,978
Other	$	23,900

Costs in the Machining cost pool are assigned to products based on machine-hours (MHs) and costs in the Setting Up cost pool are assigned to products based on the number of batches. Costs in the Other cost pool are not assigned to products. The following table shows the machine-hours and number of batches associated with each of the company's two products:

	MHs	Batches
Product E8	2,580	1,330
Product V8	8,450	1,180
Total	11,030	2,510

Additional data concerning the company's products appears below:

	Product E8		Product V8
Sales (total)	$	273,000	$	273,000
Direct materials (total)	$	88,300	$	83,500
Direct labor (total)	$	99,400	$	66,300

Required:
a.	Calculate activity rates for each activity cost pool using activity-based costing. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)

	Activity Rate
Machining	$	per MH
Setting up	$	per batch

b.	Determine the amount of overhead cost that would be assigned to each product using activity-based costing. (Omit the "$" sign in your response.)

	Product E8	Product V8
Machining	$	$
Setting up
Total	$	$

c.	Determine the product margins for each product using activity-based costing. (Omit the "$" sign in your response.)

	Product Margin
Product E8	$
Product V8	$

Explanation: a.
Computation of activity rates:

Activity Cost Pools	Total Cost		Total Activity		Activity Rate
Machining	$	72,798	11,030	MHs	$	6.60	per MH
Setting up	$	119,978	2,510	batches	$	47.80	per batch

b.
Assign overhead costs to products:
Overhead cost for Product E8:

	Activity Rate			Activity		ABC Cost
Machining	$	6.60	per MH	2,580	MHs	$	17,028
Setting up	$	47.80	per batch	1,330	batches		63,574
Total						$	80,602

Overhead cost for Product V8:

	Activity Rate			Activity		ABC Cost
Machining	$	6.60	per MH	8,450	MHs	$	55,770
Setting up	$	47.80	per batch	1,180	batches		56,404
Total						$	112,174

c.
Determine product margins:

	Product E8				Product V8
Sales			$	273,000			$	273,000
Direct materials	$	88,300			$	83,500
Direct labor		99,400				66,300
Machining		17,028				55,770
Setting up		63,574		268,302		56,404		261,974
Product margin			$	4,698			$	11,026

Blockmon Hospital bases its budgets on patient-visits. The hospital's static planning budget for November appears below:

Blockmon Hospital bases its budgets on patient-visits. The hospital's static planning budget for November appears below:

Budgeted number of patients-visits		8,300
Budgeted variable costs:
Supplies (@ $8.39 per patient-visit)	$	69,637
Laundry (@ $7.89 per patient-visit)		65,487
Budgeted fixed costs:
Wages and salaries		97,800
Occupancy costs		80,180
Total cost	$	313,104

Required:

Complete the flexible budget for 8,800 patient-visits per month. (Omit the "$" sign in your response.)

	Cost Formula (per patient-visit)	Flexible Budget Based on 8,800 Patient-Visits
Variable costs:
Supplies	$ 8.39	$
Laundry	7.89
Fixed costs:
Wages and salaries
Occupancy costs
Total cost		$

Filkins Clinic bases its budgets on the activity measure patient-visits. During February, the clinic

Filkins Clinic bases its budgets on the activity measure patient-visits. During February, the clinic planned for 4,400 patient-visits, but the actual level of activity was 4,600 patient-visits. The clinic has provided the following data concerning the formulas it uses in its budgeting:

	Fixed element per month			Variable element per patient-visit
Revenue				$	32.60
Personnel expenses	$	31,900		$	10.00
Medical Supplies	$	1,900		$	6.00
Occupancy expenses	$	6,900		$	2.00
Administrative expenses	$	5,900		$	0.20

Required:

Complete the report showing the clinic's activity variances for February. (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.)

Filkins Clinic Activity Variances For the Month Ended February 28
Revenue	$	F
Expenses:
Personnel expenses		U
Medical Supplies		U
Occupancy expenses		U
Administrative expenses		U
Total expense		U
Net operating income	$	F

Explanation:

Filkins Clinic Activity Variances For the Month Ended February 28
	Planning Budget		Flexible  Budget		Activity Variances
Patient-visits (q)		4,400		4,600
Revenue ($32.60q)	$	143,440	$	149,960	$	6,520	F
Expenses:
Personnel expenses ($31,900 + $10.00q)		75,900		77,900		2,000	U
Medical Supplies ($1,900 + $6.00q)		28,300		29,500		1,200	U
Occupancy expenses ($6,900 + $2.00q)		15,700		16,100		400	U
Administrative expenses ($5,900 + $0.20q)		6,780		6,820		40	U
Total expense		126,680		130,320		3,640	U
Net operating income	$	16,760	$	19,640	$	2,880	F