Sierra Company incurs the following costs to produce and sell its only product. Variable costs per...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Sierra Company incurs the following costs to produce and sell its only product. Variable costs per unit: Direct materials Direct labor 11 Variable manufacturing overhead Variable selling and adniniatrative expenses Fixed costs per yeari Fixed manufacturing overhead Fixed selling and adminiatrative expenses $ 123,000 $ 305,000 During this year, 30,750 units were produced and 24,500 units were sold. The Finished Goods inventory account at the end of this year shows a balance of $143,750 for the 6,250 unsold units. Required: 1-a. Calculate this year's ending balance in Finished Goods inventory two ways-using variable costing and using absorption costing. 1-b. Does it appear that the company is using variable costing or absorption costing to assign costs to the 6,250 units in its Finished Goods inventory? 2. Assume that the company wishes to prepare this year's financial statements for its stockholders. a. Is Finished Goods inventory of $143,750 the correct amount to include on the balance sheet for external reporting purposes? b. What balance should be reported in the Finished Goods inventory account for external reporting purposes? Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2A Reg 28 Calculate this year's ending balance in Finished Goods inventory two ways-using variable costing and using absorption costing. Ending Balance in Finished Goods Variable costing Absorption costing Reg 1A Req 18 > Complete this question by entering your answers in the tabs below. Req 1A Reg 18 Reg 2A Req 28 Does it appear that the company is using variable costing or absorption costing to assign costs to the 6,250 units in its Finished Goods inventory? OAbsorption costing Ovariable costing ( Req 1A Req 2A > Complete this question by entering your answers in the tabs below. Reg 1A Reg 1B Req 2A Req 28 Assume that the company wishes to prepare this year's financial statements for its stockholders. Is Finished Goods inventory of $143,750 the correct amount to include on the balance sheet for external reporting purposes? OYes, because variable costing is generally accepted for extemal reporting. No, because variable costing is not generally accepted for external reporting. Yes, because absorption costing is generally accepted for external reporting. No, because absorption costing is not generally accepted for external reporting. < Req 18 Req 28 > Complete this question by entering your answers in the tabs below. Reg 1A Reg 18 Reg 2A Req 28 Assume that the company wishes to prepare this year's financial statements for its stockholders. What balance should be reported in the Finished Goods inventory account for external reporting purposes? Finished goods inventory balance for external reporting purposes < Req 2A Reg 20> Sierra Company incurs the following costs to produce and sell its only product. Variable costs per unit: Direct materials Direct labor 11 Variable manufacturing overhead Variable selling and adniniatrative expenses Fixed costs per yeari Fixed manufacturing overhead Fixed selling and adminiatrative expenses $ 123,000 $ 305,000 During this year, 30,750 units were produced and 24,500 units were sold. The Finished Goods inventory account at the end of this year shows a balance of $143,750 for the 6,250 unsold units. Required: 1-a. Calculate this year's ending balance in Finished Goods inventory two ways-using variable costing and using absorption costing. 1-b. Does it appear that the company is using variable costing or absorption costing to assign costs to the 6,250 units in its Finished Goods inventory? 2. Assume that the company wishes to prepare this year's financial statements for its stockholders. a. Is Finished Goods inventory of $143,750 the correct amount to include on the balance sheet for external reporting purposes? b. What balance should be reported in the Finished Goods inventory account for external reporting purposes? Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2A Reg 28 Calculate this year's ending balance in Finished Goods inventory two ways-using variable costing and using absorption costing. Ending Balance in Finished Goods Variable costing Absorption costing Reg 1A Req 18 > Complete this question by entering your answers in the tabs below. Req 1A Reg 18 Reg 2A Req 28 Does it appear that the company is using variable costing or absorption costing to assign costs to the 6,250 units in its Finished Goods inventory? OAbsorption costing Ovariable costing ( Req 1A Req 2A > Complete this question by entering your answers in the tabs below. Reg 1A Reg 1B Req 2A Req 28 Assume that the company wishes to prepare this year's financial statements for its stockholders. Is Finished Goods inventory of $143,750 the correct amount to include on the balance sheet for external reporting purposes? OYes, because variable costing is generally accepted for extemal reporting. No, because variable costing is not generally accepted for external reporting. Yes, because absorption costing is generally accepted for external reporting. No, because absorption costing is not generally accepted for external reporting. < Req 18 Req 28 > Complete this question by entering your answers in the tabs below. Reg 1A Reg 18 Reg 2A Req 28 Assume that the company wishes to prepare this year's financial statements for its stockholders. What balance should be reported in the Finished Goods inventory account for external reporting purposes? Finished goods inventory balance for external reporting purposes < Req 2A Reg 20>
Expert Answer:
Answer rating: 100% (QA)
Question 1a Please refer to the attached photo 1b Based on the computa... View the full answer
Related Book For
Managerial Accounting
ISBN: 978-0697789938
13th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
Posted Date:
Students also viewed these accounting questions
-
Sierra Company incurs the following costs to produce and sell its only product. Variable costs per unit: Direct materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $...
-
Sierra Company incurs the following costs to produce and sell a single product. During the last year, 25,000 units were produced and 22,000 units were sold. The Finished Goods inventory account at...
-
Amcor, Inc., incurs the following costs to produce and sell a single product. Variable costs per unit: Direct materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . $10 Direct labor . . ....
-
Liberty Ventures Inc. reported a $320,000 profit in 2020 and declared preferred dividends of $20,000. The following changes in common shares outstanding occurred during the year: Jan 1 100,000 common...
-
For a data set obtained from a sample, n = 20 and x. It is known that = 3.1. The population is normally distributed. a. What is the point estimate of ? b. Make a 99% confidence interval for . c....
-
In Prob. 3.26, determine the perpendicular distance from point D to a line drawn through points A and B. Problem 3.26: A wooden board AB, which is used as a temporary prop to support a small roof,...
-
Meo Consulting, Inc., completed the following transactions during February 2010, its first month of operations: Requirements 1. Record transactions in the journal. Explanations are not required. 2....
-
Flores Chemical Co. recorded costs for the month of $18,900 for materials, $44,100 for labor, and $26,250 for factory overhead. There was no beginning work in process, 8,000 units were finished, and...
-
Show all necessary work for each problem; your work is part of the grading criteria. Precise usage of language and symbols/notations is part of the grading. 1. (9 points) Sally wants to save up for a...
-
Get It Right, CPAs, has been retained to review its client's corporate formation calculations for 20XX. Maria, Roger, and Novak created Grassroots Tennis, Inc. (GTI), which began operations on March...
-
A company purchased equipment at the beginning of 2024 for $650,000. In 2024 and 2025, the company depreciated the asset on a straight-line basis with an estimated service life of eight years and a...
-
2. Suppose a firm issued a 10% coupon bond (annual coupon) 10 years ago. The bond now has 5 years left until its maturity date, but the firm is having financial difficulties. Investors believe that...
-
Students are to choose a capacity planning strategy. Students will also choose a department from the Receiving, Production, or Shipping departments to apply the strategy and develop a plan to...
-
Student: Robert Hamlin Date: 10/11/22 Assignment: Chapter 6 1. Dazzling Corporation manufactures and sells two types of decorative lamps, Knox and Ayer. The following data are available for the year...
-
The first harmonic of a series created by a standing air wave in a tube open at one end only is 35.4 Hz. If the length of the tube is 218 cm, calculate the speed of sound of the air. Use two digits...
-
Determining organizational priorities and needs for projects is important to project success factors. How do equity and SDOH fit in with your project Patient-Centered Communication Share a time when...
-
Lemon Brothers, a large Lemon distributor in the U.S., is selling 50,000 tons per year on credit at an average selling price of $1000 per ton. The average customer payment is for purchasing 0.055-...
-
Rowland Textile Inc. manufactures two products: sweatshirts and T-shirts. The manufacturing process involves two activities: cutting and sewing. Expected overhead costs and cost drivers are as...
-
What costs are assigned to a segment under the contribution approach?
-
"I was sure that when our battery hit the market it would be an instant success," said Roger Strong, founder and president of Solar Technology, Inc. "But just look at the gusher of red ink for the...
-
What is the contribution margin?
-
What is thermodynamics?
-
Explain the scope and limitations of thermodynamics.
-
An astronaut weighs \(800 \mathrm{~N}\) on the earth's surface where the acceleration of gravity is \(g=9.83 \mathrm{~m} / \mathrm{s}^{2}\). The mass and the radius of the moon are \(7.4 \times...
Study smarter with the SolutionInn App