CH 4
The cost per equivalent unit for
materials for the month in the first
processing department is closest to:
What are __ Department's equivalent
units of production related to
conversion costs for Month? (Weighted
Average)
What were the equivalent units for
conversion costs in __ Department for
the month? (Weighted Average)
The cost per equivalent unit for
conversion costs for the month closest
to:
How many units are in ending work in
process inventory in the first processing
department at the end of the month?
(Materials / Conversion %)
Total cost to be accounted for under
the weighted-average method would
be:
The cost per equivalent unit for
conversion costs for Month in the __
Department is closest to:
Total Costs of Units Completed and
transferred out was: (Weighted
Average)
If the cost per equivalent unit for
August was _ for materials and _ for
labor and overhead, the total cost
assigned to the ending work in process
inventory was:
The total cost transferred from the 1st
processing month to next processing
month during month is closes to:
1.
Units in beginning work in process inventory + Units started into production or transferred in = Units in
ending work in process inventory + Units completed and transferred out
2. Units transferred to the next department (+) Units in Ending WIP (#1 Answer * Ending Inventory %) =
Equivalent units of production (B)
3. Costs of units in beginning work in process inventory (+) Material Costs added during the period in the
first month = Total Cost (A)
4. Total Cost (A) / Equivalent Units of Production (B) = Cost per equivalent unit
Equivalent units of production = Units transferred to the next department or to finished goods + Equivalent units
in ending work in process inventory (Units in process _% complete with respect to conversion costs)
1.
Units transferred to the next department = Units in beginning work in process + Units started into
production - Units in ending work in process
2. Conversion: Units transferred to the next department (1) + Ending WIP Conversion (Units in ending
work in process*Completion % with respect to conversion costs) = Equivalent Units of Production
1. Units transferred to the next department = Units in beginning work in process + Units started into
production - Units in ending work in process
2. Conversion: Units transferred to the next department (1) + Ending WIP Conversion (Units in ending
work in process*Completion % with respect to conversion costs) = Equivalent Units of Production (B)
3. Conversion: Cost of beginning work in process inventory (+) Conversion costs added or incurred during
the period = Total Cost (A)
4. Total Cost (A) / Equivalent Units of Production (B) = Cost per equivalent unit
Units in ending work in process = Units in beginning work in process + Units started into production - Units
transferred to the next department
Costs to be accounted for as follows: Cost of ending work in process inventory (+) Cost of units transferred out
1.
2.
3.
1.
2.
Units completed and transferred to the next department (+) Ending WIP Conversion (Units in ending
work in process*Completion % with respect to conversion costs) = Equivalent Units of Production (B)
Conversion: Cost of Beginning WIP Inventory + Costs Added during the Period = Total Cost (A)
Total Cost (A) / Equivalent Units of Production (B) = Cost per equivalent unit
Equivalent cost materials (+) Equivalent cost conversion = Total unit cost
Unit transferred out × unit cost = Total Costs of Units Completed and transferred out
Cost of Ending WIP = (Units in Ending Inventory *Completion in respect of direct material *Cost per equivalent
unit direct material) + (Units in Ending Inventory *Completion in respect of direct material *Cost per equivalent
unit of conversion cost)
(1) Units completed & transferred out
to next department during the month
(2) Units in Ending WIP Inventory:
(3) Equivalent Units of Production
(1) Units in Beginning WIP Inventory
(2) Costs added incurred during month
(3) Total costs
(4) Cost per equivalent unit
Cost of the Units completed &
transferred out
Materials
__
Conversion
__
__ (Units *% Complete with
respect to materials)
(2) + (1)
__ (Units *% Complete with
respect to conversion)
(2) + (1)
Materials
__
__
(2) + (1)
(3) / Equivalent Units of
Production
Materials (1)
(Units completed &
transferred out to next
department during the
Conversion
__
__
(2) + (1)
(3) / Equivalent Units of
Production
Conversion (2)
(Units completed &
transferred out to next
department during the
Total
(1)+(2)
The cost of units transferred out during
the month was
The cost of ending work in process
inventory in the first processing
department according to the company’s
cost system is closest to: (Round "Cost
per equivalent unit" to 3 decimal
places.) (Weighted Average)
1.
2.
3.
4.
month) * Cost per
month) * Cost per
equivalent unit
equivalent unit
Make sure % components total to 100% for units completed and transferred
Equivalent Units of Units Completed and Transferred = Physical Units of Units Completed
Total cost per equivalent unit = Material cost per eq. unit + Conversion cost per eq. unit
Cost of units transferred out during the month = Units Completed × Total Cost per Equivalent Unit
CH 5
What are the company's variable expenses per unit?
_ Corporation has a margin of safety percentage of _%
based on its actual sales. The break-even point is $_ and
the variable expenses are _% of sales. Given this
information, the actual profit is:
If company has target profit of $_, sales in units must be:
What is total contribution margin if sales volume
increases by _%?
If total fixed expenses are $_, the degree of operating
leverage is:
Given these data, the annual fixed expenses associated
with the textbook total:
If fixed expenses totaled $_ for the year, the break-even
point in unit sales was:
Sunripe expects to have a total of $_ in fixed expenses
next year. What is overall break-even point next year in
sales dollars?
If the company increases its unit sales volume by _%
without increasing its fixed expenses, then total net
operating income should be closest to: (Round your
intermediate calculations to 2 decimal places.)
Houpe Corporation produces and sells a single product.
Data concerning that product appear below:
Break even units = Fixed costs / (Selling price – Variable cost)
Profit = (Contribution margin ratio × Sales) − Fixed expenses
Dollar sales to break even = Fixed expenses ÷ Contribution margin ratio
1. Contribution margin ratio = 1 − Variable expense ratio
2. Dollar sales to break even * CM Ratio = Fixed expenses
3. Total actual Sales 
a. Margin of safety in dollars = Total actual sales − Break-even sales
b. Margin of safety percentage = Margin of safety in dollars ÷ Total actual sales
c. Margin of safety percentage = (Total actual sales − Break-even sales) ÷ Total actual
sales
d. Margin of safety percentage = 1 − Break-even sales ÷ Total actual sales
e. Break-even sales ÷ Total actual sales = 1 − Margin of safety percentage
f.
Total actual sales = Break-even sales ÷ (1 − Margin of safety percentage)
4. Profit = (Contribution margin ratio × Sales) − Fixed expenses
1. Unit sales to break even = Fixed expenses ÷ Unit contribution margin
2. Unit sales to attain a target profit = (Target profit + Fixed expenses) ÷ Unit contribution
margin
1. Contribution margin = Contribution margin ratio × Sales
2. Contribution margin = CM ratio * (Sales * Percent Increase)
1. Contribution margin = Sales − Variable expenses
2. Net operating income = Contribution margin − Fixed expenses
3. Degree of operating leverage = Contribution margin ÷ Net operating income
1. Unit contribution margin = Selling price per unit − Variable expenses per unit
2. Unit sales to break even = Fixed expenses ÷ Unit contribution margin
1.
Profit = (Sales − Variable expenses) − Fixed expenses
2. Variable expenses = Sales revenue – fixed expenses – NOI
3. Contribution margin ratio = Contribution margin ÷ Sales
4. Dollar sales to break even = Fixed expenses ÷ Contribution margin ratio
5. Unit sales to break even = Dollar sales to break-even/Selling price per unit
STANDARD
DELUX
TOTAL
TOTAL SALES
TOTAL VAR
COSTS
TOTAL CM
1. Sales – Var expenses = CM
2. CM ratio = CM/Total Sales
3. Dollar sales to break even = Fixed expenses ÷ Contribution margin ratio
1. Unit sales = Units produced and sold* % increase
2. Unit selling price = Sales revenue/units produced and sold
3. Var manufacturing expense per unit (CALCULATE)
4. Var SG&A expense per unit (CALCULATE)
Overall net operating income will decrease by $24,500.
Percent of
Per Unit
Sales
$
Selling price
100%
140
Variable expenses 42
30%
Contribution
margin
$
98
Unit sales (increase by 500 units)
Sales (at $140 per unit and $133
per unit)
Variable expenses (at $42 per unit)
Contribution margin
Fixed expenses (increase by
$28,000)
70%
Net operating income
6,000 units
6,500 units
$ 840,000
$ 864,500
252,000
588,000
273,000
591,500
490,000
518,000
$ 98,000
$ 73,500
Fixed expenses are $490,000 per month. The company is
currently selling 6,000 units per month.
The marketing manager would like to cut the selling price
by $7 and increase the advertising budget by $28,000 per
month. The marketing manager predicts that these two
changes would increase monthly sales by 500 units. What
should be the overall effect on the company's monthly
net operating income of this change?
Dietrick Corporation produces and sells two products.
Data concerning those products for the most recent
month appear below:
Sales
Variable expenses
Product B32L Product K84B
$ 46,000
$ 27,000
$ 13,800
$ 14,670
Sales (a)
Variable expenses
Product B32L
$ 46,000
13,800
Product K84B
$ 27,000
14,670
Contribution margin (b)
$ 32,200
$ 12,330
Contribution margin ratio (b) ÷ (a)
70.0%
45.7%
The overall break-even point for the entire company would decrease if the sales mix shifts toward
Product B32L because Product B32L has a higher contribution margin (70.0%) than Product K84B
(45.7%).
Fixed expenses for the entire company were $42,550.
If the sales mix were to shift toward Product B32L with
total sales remaining constant, the overall break-even
point for the entire company:
CH 6
What is the net operating income (loss) for the
month under variable costing?
What is the amount of the common fixed expense
not traceable to the individual divisions?
If the contribution margin for Product P was $_,
the segment margin for Product P was:
There was no beginning inventory. Assume that
direct labor is a variable cost. The contribution
margin per unit was:
Variable production costs per unit, total fixed
manufacturing expenses, and the number of units
produced were the same in prior months. Under
absorption costing, for November the company
would report a:
1.
2.
DM+DL+MOH = Var costing unit product cost
Sales – Variable Expenses = CM
a. Sales = (Selling price *Units sold)
b. Variable expenses = (Var costing unit product cost*units sold) * (Var selling/admin cost per
unit *units sold)
3. CM-FE = Net Operating Income
a. Fixed Expenses = Fixed selling and admin + Fixed MOH
Net operating income = Total Segment margin − Common fixed expenses
1.
2.
1.
2.
3.
1.
Net operating income + Common fixed expenses = Total Segment margin
Total segment margin = Product Q segment margin + Product P segment margin
Var expenses per unit: TOTAL
a. Direct materials (Production costs ÷ units produced)
b. Direct labor (Production costs ÷ units produced)
c. Variable manufacturing overhead (Production costs ÷ units produced)
d. Variable selling expenses (Production costs/units sold)
Selling price per unit = Total sales/units sold
Unit CM = Selling price per unit − Variable expenses per unit
Units sold = Sales/selling price per unit