Martin Manufacturing Company
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1)Martin Manufacturing Company (MMC) produced 1000 units of product during 2003. The Company incurred variable production cost amounting to $380 per unit. Fixed manufacturing overhead costs amounted to $130,000. MMC sold 900 units of product at a price of $800 per unit.
Assuming MMC uses variable costing, the amount of income recognized on the income statement would be:
a. $248,000.
b. $210,000.
c. $261,000.
d. None of the above
2)Assuming MMC uses absorption costing, the amount of inventory shown on the balance sheet would be:
a. $38,000.
b. $51,000.
c. $13,000.
d. None of the above.
3)The following information was drawn from the accounting records of Glide Manufacturing Company (GMC). As the data suggest, GMC uses a job-order costing system:
Job 101 Job 102 Job 103
Direct Materials $3,500 $4,200 $3,300 Direct Labor $2,800 $3,600 $1900
The predetermined overhead rate is set at 120% of the direct labor costs. At the end of the accounting period, Jobs 101 and 102 had been completed and sold. Job 103 was still under construction. The balance in the work in process inventory is:
a. $7,480.
b. $5,200.
c. $7,100.
d. None of the above.
4)Determine the gross margin recognized on job 102 assuming it is sold for $18,000. (Ignore any overapplied or underapplied overhead).
a. $250.
b. $50.
c. $150.
d. None of the above.
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Solution Summary
This solution is comprised of a detailed explanation to determine the amount of income recognized on the income statement, the amount of inventory shown on the balance sheet, the balance in the work in process inventory, and the gross margin recognized on job 102 assuming it is sold for $18,000.
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Managerial Accounting- Unit V
1)Martin Manufacturing Company (MMC) produced 1000 units of product during 2003. The Company incurred variable production cost amounting to $380 per unit. Fixed manufacturing overhead costs amounted to $130,000. MMC sold 900 units of product at a price of $800 per unit.
Assuming MMC uses variable costing, the amount of income recognized on the income statement would be:
a. $248,000.
b. $210,000.
c. $261,000.
d. None of the above
Sales (900 units x ...
Purchase this Solution
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