Presented below is Ashton Company's Income Statement prepared using absorption costing: (Please assume that Ashton Company...
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Presented below is Ashton Company's Income Statement prepared using absorption costing: (Please assume that Ashton Company sells all units it prododuces) Requirement 1: Replace the two unknown amounts (?) in A. and B. as directed. To find the unknown for B, you will have to complete Requirement 2. Then, complete the totals on the income statement. Sales (45,000 units) Cost of Goods Sold Direct materials (variable) Direct labor (variable) Manufacturing Overhead (mixed) Gross Margin Operating Expenses Ashton Company Income Statement For the Year Ended December 31, 2013 Commissions (variable) Shipping (variable) Advertising (fixed) Billing (mixed) Sales and Administrative salaries Total Operating Expenses Net Operating Income (Loss) $90,000 78,300 98,500 27,000 ? 100,000 ? 60,000 $450,000 266,800 183,200 A. Multiply the HIGHEST digit from the last four digits of your student ID entered above by 1,000 and enter the result here B.Complete Requirement 2 below and insert result Requirement 2: Billing costs for the past 5 years along with total units sold follows: Use the high-low method to calculate the following: a. Variable cost per unit b. Total fixed costs (Please use the high point) c. Total cost equation for billing costs d. Total billing costs if 45,000 units are sold Year 2012 2011 2010 2009 2008 Show your work here: Sales in Units 47,500 44,000 42,000 45,500 46,000 Billing Costs 6,750 6,300 6,180 6,580 $ $ $ $ $ 6,600 ANSWER Insert your answer for requirement 1 in the income statement above in the blank provided for Billing (Unknown B) Selling price per unit is $10 and variable manufacturing overhead is 30 cents per unit. All variable expenses in the company vary in terms of units sold (produced). There was no change in beginning or ending inventories. Ashton's plant has a capacity of 80,000 units per year. The company has been operating at loss for several years. Management is studying several possible courses of action to determine what should be done to make next year profitable. Requirement 3: Redo Ashton's 2013 income statement in contribution margin format, showing both a total column and a per unit column in the space provided below. (Hint: Divide the total column by units to get per unit amount) Hint: You will need to calculate the variable and fixed components of Manufacturing Overhead (MOH) and billing. Total Units 45,000 Sales Variable Costs Direct materials Direct Labor Variable MOH Sales commissions Shipping Variable billing Total Variable Costs Contribution Margin Fixed Costs Fixed MOH Advertising Sales and admn. salaries. Fixed billing Total Fixed Costs Net Operting Income Amount Per Unit $ 450,000.00 $ 10.00 Requirment 4: Calculate Ashton's current breakeven point in both units and dollars. Show your work. Units: Dollars: Units Dollars ANSWER Presented below is Ashton Company's Income Statement prepared using absorption costing: (Please assume that Ashton Company sells all units it prododuces) Requirement 1: Replace the two unknown amounts (?) in A. and B. as directed. To find the unknown for B, you will have to complete Requirement 2. Then, complete the totals on the income statement. Sales (45,000 units) Cost of Goods Sold Direct materials (variable) Direct labor (variable) Manufacturing Overhead (mixed) Gross Margin Operating Expenses Ashton Company Income Statement For the Year Ended December 31, 2013 Commissions (variable) Shipping (variable) Advertising (fixed) Billing (mixed) Sales and Administrative salaries Total Operating Expenses Net Operating Income (Loss) $90,000 78,300 98,500 27,000 ? 100,000 ? 60,000 $450,000 266,800 183,200 A. Multiply the HIGHEST digit from the last four digits of your student ID entered above by 1,000 and enter the result here B.Complete Requirement 2 below and insert result Requirement 2: Billing costs for the past 5 years along with total units sold follows: Use the high-low method to calculate the following: a. Variable cost per unit b. Total fixed costs (Please use the high point) c. Total cost equation for billing costs d. Total billing costs if 45,000 units are sold Year 2012 2011 2010 2009 2008 Show your work here: Sales in Units 47,500 44,000 42,000 45,500 46,000 Billing Costs 6,750 6,300 6,180 6,580 $ $ $ $ $ 6,600 ANSWER Insert your answer for requirement 1 in the income statement above in the blank provided for Billing (Unknown B) Selling price per unit is $10 and variable manufacturing overhead is 30 cents per unit. All variable expenses in the company vary in terms of units sold (produced). There was no change in beginning or ending inventories. Ashton's plant has a capacity of 80,000 units per year. The company has been operating at loss for several years. Management is studying several possible courses of action to determine what should be done to make next year profitable. Requirement 3: Redo Ashton's 2013 income statement in contribution margin format, showing both a total column and a per unit column in the space provided below. (Hint: Divide the total column by units to get per unit amount) Hint: You will need to calculate the variable and fixed components of Manufacturing Overhead (MOH) and billing. Total Units 45,000 Sales Variable Costs Direct materials Direct Labor Variable MOH Sales commissions Shipping Variable billing Total Variable Costs Contribution Margin Fixed Costs Fixed MOH Advertising Sales and admn. salaries. Fixed billing Total Fixed Costs Net Operting Income Amount Per Unit $ 450,000.00 $ 10.00 Requirment 4: Calculate Ashton's current breakeven point in both units and dollars. Show your work. Units: Dollars: Units Dollars ANSWER
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