? ? ? Listed here are the total costs associated with the production of 1,000 drum sets
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Listed here are the total costs associated with the production of 1,000 drum sets manufactured by TrueBeat. The drum sets sell for $516 each. Costs 1. Plastic for casing-$19,000 2. Wages of assembly workers-$90,000 3. Property taxes on factory-$7,000 4. Accounting staff salaries-$33,000 5. Drum stands (1,000 stands purchased)-$35,000 6. Rent cost of equipment for sales staff-$36,000 7. Upper management salaries-$170,000 8. Annual flat fee for factory maintenance service-$16,000 9. Sales commissions-$25 per unit 10. Machinery depreciation, straight-line-$42,000 All other costs are considered consistent and within relevant range for production of 4,000 to 8,000 units. Use the information provided above to adjust amounts from the table in 1). Include the adjusted amounts in the table below. TrueBeat adjusted summarized data for production 4,000 to 8,000 units Adjust summarized data Average Cost per Unit Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling & administrative expense Variable selling & administrative expense $13.5 Sales price per unit 108 $ 62 $ Total Dollars Sales revenue Variable production costs Variable S&A expenses Contribution Margin Fixed Overhead Fixed S&A expenses Net Operating Income 198.000 275.000 Note: The table above may be submitted early for verification. Upload it to the "submission" drop box on D2L, email or text a photo or PDF to Teri and she will look at it before you continue with the project. 3) TrueBeat's management will need to produce 4,000 units in Years 2 and 3 (to meet relevant range) and 6,000 units in Year 4. However, they anticipate selling only 3,000 units in Year 2 but 5,000 units in Years 3 and 6,000 units in Year 4. They will have to carry inventory produced in Year 2 until it is sold in Year 3. Note: Net Operating Income, or NOI, for this course is essentially Income before interest or tax expense and represents the operationally controlled components of Net Income. 7000+8000+ 63,000 + 120,000 170,000+ 33,000+72,000 a) Using variable costing and contribution margin income statement format, prepare predictive income statements for Years 2, 3 and 4 below. 2 TrueBeat Income Statement (Variable Costing) For Years ending December 31 Year 2 Year 3 Year 4 b) Using absorption costing, prepare an absorption costing income statements for TrueBeat for Years 2, 3 and 4. Sales revenue Cost of Goods Sold Gross Margin S&A expenses Net Operating Income TrueBeat Income Statement (Absorption Costing) For Years ending December 31 Year 2 Year 3 Year 4 c) Do you think TrucBeat's decision to maintain drum sets inventory from year 2 until they are sold in year 3 was a good decision? Use complete sentences and 30 to 50 words in your answer. Listed here are the total costs associated with the production of 1,000 drum sets manufactured by TrueBeat. The drum sets sell for $516 each. Costs 1. Plastic for casing-$19,000 2. Wages of assembly workers-$90,000 3. Property taxes on factory-$7,000 4. Accounting staff salaries-$33,000 5. Drum stands (1,000 stands purchased)-$35,000 6. Rent cost of equipment for sales staff-$36,000 7. Upper management salaries-$170,000 8. Annual flat fee for factory maintenance service-$16,000 9. Sales commissions-$25 per unit 10. Machinery depreciation, straight-line-$42,000 All other costs are considered consistent and within relevant range for production of 4,000 to 8,000 units. Use the information provided above to adjust amounts from the table in 1). Include the adjusted amounts in the table below. TrueBeat adjusted summarized data for production 4,000 to 8,000 units Adjust summarized data Average Cost per Unit Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling & administrative expense Variable selling & administrative expense $13.5 Sales price per unit 108 $ 62 $ Total Dollars Sales revenue Variable production costs Variable S&A expenses Contribution Margin Fixed Overhead Fixed S&A expenses Net Operating Income 198.000 275.000 Note: The table above may be submitted early for verification. Upload it to the "submission" drop box on D2L, email or text a photo or PDF to Teri and she will look at it before you continue with the project. 3) TrueBeat's management will need to produce 4,000 units in Years 2 and 3 (to meet relevant range) and 6,000 units in Year 4. However, they anticipate selling only 3,000 units in Year 2 but 5,000 units in Years 3 and 6,000 units in Year 4. They will have to carry inventory produced in Year 2 until it is sold in Year 3. Note: Net Operating Income, or NOI, for this course is essentially Income before interest or tax expense and represents the operationally controlled components of Net Income. 7000+8000+ 63,000 + 120,000 170,000+ 33,000+72,000 a) Using variable costing and contribution margin income statement format, prepare predictive income statements for Years 2, 3 and 4 below. 2 TrueBeat Income Statement (Variable Costing) For Years ending December 31 Year 2 Year 3 Year 4 b) Using absorption costing, prepare an absorption costing income statements for TrueBeat for Years 2, 3 and 4. Sales revenue Cost of Goods Sold Gross Margin S&A expenses Net Operating Income TrueBeat Income Statement (Absorption Costing) For Years ending December 31 Year 2 Year 3 Year 4 c) Do you think TrucBeat's decision to maintain drum sets inventory from year 2 until they are sold in year 3 was a good decision? Use complete sentences and 30 to 50 words in your answer.
Expert Answer:
Answer rating: 100% (QA)
i New selling prie 516104644 Old contirbution Sales 516000 Variable cost Plastic for casing 19000 Wa... View the full answer
Related Book For
Statistics for the Life Sciences
ISBN: 978-0321989581
5th edition
Authors: Myra Samuels, Jeffrey Witmer, Andrew Schaffner
Posted Date:
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