Dayton Lighting Company had operating income for the first 10 months of the current year of...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Dayton Lighting Company had operating income for the first 10 months of the current year of $630,000. Ninety thousand units were manufactured during this period (the same as the planned production), and 90,000 units were sold. Fixed manufacturing overhead was $6,300,000 over the 10-month period (i.e., $630,000 per month). There are no selling and administrative expenses for Dayton Lighting Company. Both variable and fixed costs are expected to continue at the same rates for the balance of the year (i.e., fixed costs at $630,000 per month and variable costs at the same variable cost per unit). There were 10,900 units in inventory on October 31. Eighteen thousand units are to be produced and 17,100 units are to be sold in total over the last two months of the current year. Assume the unit variable cost is the same in the current year as in the previous year. (Hint: You cannot calculate revenue or cost of goods sold; you must work directly with contribution margin or gross margin.) Required: 1. If operations proceed as described, will operating income be higher under variable or absorption costing for the current year in total? 2. If operations proceed as described, what will operating income for the year in total be under (a) variable costing and (b) absorption costing? Dayton Lighting Company had operating income for the first 10 months of the current year of $630,000. Ninety thousand units were manufactured during this period (the same as the planned production), and 90,000 units were sold. Fixed manufacturing overhead was $6,300,000 over the 10-month period (i.e., $630,000 per month). There are no selling and administrative expenses for Dayton Lighting Company. Both variable and fixed costs are expected to continue at the same rates for the balance of the year (i.e., fixed costs at $630,000 per month and variable costs at the same variable cost per unit). There were 10,900 units in inventory on October 31. Eighteen thousand units are to be produced and 17,100 units are to be sold in total over the last two months of the current year. Assume the unit variable cost is the same in the current year as in the previous year. (Hint: You cannot calculate revenue or cost of goods sold; you must work directly with contribution margin or gross margin.) Required: 1. If operations proceed as described, will operating income be higher under variable or absorption costing for the current year in total? 2. If operations proceed as described, what will operating income for the year in total be under (a) variable costing and (b) absorption costing?
Expert Answer:
Related Book For
Managerial Accounting Creating Value in a Dynamic Business Environment
ISBN: 978-0078110917
9th edition
Authors: Ronald W. Hilton
Posted Date:
Students also viewed these accounting questions
-
Dayton Lighting Company had net income for the first 10 months of the current year of $200,000. One hundred thousand units were manufactured during this period (the same as the planned production),...
-
In the current year, Riflebird Company had operating income of $220,000, operating expenses of $175,000, and a long-term capital loss of $10,000. How do Riflebird Company and Roger, the sole owner of...
-
The Tuxedo Division of Shamus OToole Company had operating income last year of $ 340,000 and average operating assets of $ 3,500,000. OTooles minimum acceptable rate of return is 7 percent. (Round...
-
In Exercises 1 through 18, differentiate the given function. y 2+1 1-2
-
Is an investment in Treasury bills always classified as a cash equivalent? Explain.
-
Let A, B, C c R2 where A = {(*, y)|y = 2x + 1}, B = {(x, y)|y = 3x}, and C = {Qt, y)|jc - y = 7}. Determine each of the following: (a) A B (b) B C (c) A- C- (d) B- C-
-
How to design a new or revise a current cost management system will depend on the characteristics of the company. Important factors of a company include the following items 1 through 7. For each of...
-
Moody Corporation uses a job-order costing system with a plantwide overhead rate based on machine-hours. At the beginning of the year, the company made the following estimates: Machine-hours required...
-
In 2024, Crane Enterprises issued, at par. 60 $1,000,8% bonds, each convertible into 100 shares of common stock. Crane had revenues of $18,600 and expenses other than interest and taxes of $8,200 for...
-
The Ace Trucking Company must determine the number of drivers and trucks to have available on a weekly basis. The standard schedule is to send drivers over the pickup and delivery route on Monday and...
-
you ask Sally and Jim if they sold any assets this year. They provide you with the following: Sally and Jim have an investment account and report a ($10,000) net short-term capital loss on the sale...
-
Need financial accounting guidance - how to handle an inventory writedown - $100,000 of inventory from 2022 has decreased in value to $30,000. How do you account for this in 2023 - balance sheet,...
-
Jamie is a 30% partner in the JSE Partnership. During the current year, the partnership reported ordinary income of $300,000 before any permitted deductions for guaranteed payments and distributions...
-
Importance of self-checking counter in the store for customers. Or why grocery stores should have self-checking counters for customers?
-
We have all had experiences where we have had to reduce our uncertainty about strangers. Or, in many cases we were the stranger. Experiences such as returning to college, changing schools, new jobs,...
-
QUESTION 2 Consider the sprinkler system shown below. The sprinkler is rotating at w = 2.5 rad/s in the direction shown but is accelerating at a = 0.5 rad/s. Focusing on Figure 2: (a) Find the...
-
In your own words: Why do you think there are measures of central tendency and variation for a distribution such as sample data? What purpose do these measures serve? What are the pros/cons of...
-
What can scientists learn by comparing the fossilized skeletons of extinct primates with the bones of modern species?
-
What is meant by a learning curve? Explain its role in cost estimation.
-
Better Bagels, Inc. manufactures a variety of bagels, which are frozen and sold in grocery stores. The production process consists of the following steps. 1. Ingredients, such as flour and raisins,...
-
Alpha-Tech, a rapidly growing distributor of electronic components, is formulating its plans for 20x5. Carol Jones, the firm's marketing director, has completed the following sales forecast. Phillip...
-
Governments obtain revenue through _________.
-
If there are far fewer sugar growers than sugar consumers, a. the growers are likely to be more informed and influential on policy than voters. b. the consumers are likely to be more informed and...
-
Which of the following would tend to raise voter turnout? a. a blizzard or heavy rainstorm on election day b. an election that is expected to be a landslide c. the longer the wait is expected to be...
Study smarter with the SolutionInn App