Question 1 

The Solar Clothing Company (SCC) experienced growth in the spring of 2022 as consumer interest in solar clothing soared. To accommodate increasing demand, SCC wants to develop plans for expansion. First, however, SCC needs to determine the cost of goods sold for an average sales period to calculate gross profit margin. Use the SCC cost information below to calculate the cost of goods sold for July 2022.

SCC Cost Information for July 2022

Direct Materials Inventory	July 1, 2022	$1,350,000
Direct Labor		$775,000
Work in Process Inventory	July 31, 2022	$650,000
Finished Goods Inventory	July 1, 2022	$875,000
Direct Materials Purchased		$2,750,000
Factory Overhead		$650,000
Direct Materials Inventory	July 31, 2022	$700,000
Work in Process Inventory	July 1, 2022	$525,000
Finished Goods Inventory	July 31, 2022	$850,000

Question 2

Using the high-low method, compute the variable cost per unit and the total fixed costs of the following Smart Watch Company information from the preceding six months.

Month	Units Produced	Total Costs
January	4,500	$190,000
February	5,000	$210,000
March	5,200	$215,000
April	4,500	$190,000
May	4,000	$175,000
June	3,000	$150,000

Question 3

Because of Smart Watch Company's extraordinary expansion plan, their fixed costs are expected to skyrocket in the next year due to hiring, long-term asset purchases, and so on. The plant manager expects fixed costs to increase to $3,000,000. It sells watches for $550, and the variable costs for each are $175. Based on this information, your manager asks you to determine the following amounts:

2. the break-even point in units,
4. the break-even point in sales dollars, and
6. the number of units needed to be sold for a profit of $1,200,000.

Question 4

Lawn Chopper Company sells two types of lawn mowers. The first one is a basic lawn mower, which has variable costs of $50 and sells for $150. The second type is a riding tractor with variable costs of $500 and which sells for $1,500. The company has total fixed costs of $5,000,000. The sales mix for the company is three lawn mowers to one riding tractor. Your manager would like to know how many of each of the product the company must sell to break even.

Question 5

Executive Desk Company has decided to price its desks at 60% above cost. The problem is they are not sure how to assign factory overhead. Your manager has asked you to price the following two jobs based on the information provided using machine hours as the base:

• Estimated factory overhead for the year: $750,000
• Estimated direct labor hours for the year: 250,000 hours
• Estimated machine hours for are: 25,000 hours
• Job 1 has incurred $6,000 of direct materials and $3,000 of direct labor, which is consistent with 400 hours of labor and 30 machine hours.
• Job 2 has incurred $8,000 of direct materials and $5,000 of direct labor, which is consistent with 500 hours of labor and 50 machine hours.

Question 6

Prepare the journal entries needed based on the following information:

• Estimated overhead for the month: $6,000
• Estimated direct labor hours: 2,000
• Purchased $35,000 of materials
• Requisitioned $10,000 of materials to be placed into production
• Incurred $4,000 of direct labor during the month (500 hours)
• Incurred the following actual factory overhead amounts:
  • Utilities: $1,000
  • Indirect materials: $500
  • Indirect labor: $1,000
  • Rent: $1,500
• Completed two jobs with a cost of $18,000
• Sold both jobs completed at price = cost + 50%
• Applied overhead is $3,000

Question 7

Pharma Company produces various medicines in capsule form. At the beginning of the month of March, it had 6,000 units that were 50% complete. These were assigned costs of $150,000. During the month, it completed 60,000 units and has 15,000 units that are 70% completed. It had production costs during the month of $600,000.

2. Finish all five steps of a production report using the weighted average method.
4. Finish all five steps of a production report using the FIFO method.

Question 8

DonutsDunRite has the following overhead during the month:

• Equipment setup: 20 hours costing $2,100
• Machine hours: 3,000 hours costing $65,000
• Moving product: 60 hours costing $1,200

The company produces only two products, Basic and Ultra, which have the following factory overhead activities associated with them:

• Equipment setup: 5 hours Basic and 10 hours Ultra
• Machine hours: 600 hours Basic and 1,400 hours Ultra
• Moving product: 35 hours Basic and 15 hours Ultra

Your manager has asked you to assign overhead to the two products using activity-based costing.

USE THIS GOOGLE SHEETS LINK TO COMPLETE

https://docs.google.com/spreadsheets/d/1SHPKYRGLwdcPo--O3pgoR_WJdXzS8g5QTUXA_cdjoEU/edit?usp=sharing

Answer rating: 100% (QA)

The the cost of goods sold COGS for July 2022 Beginning ... View the full answer