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...
-
Critique the following methodologies and suggest more appropriate alternatives: a. A supermarket is interested in determining its image. Cashiers drop a short questionnaire into the grocery bag of...
-
After five years with a national CPA firm with mostly large manufacturing clients, Amy Kimbell joined Hi-Quality Productions Inc. (Hi-Q) as manager of Manufacturing Accounting. Amy has both CPA and...
-
A single fair die is rolled. Let the event \(A\) be the face showing is even. Let the event \(B\) be the face showing is divisible by 3 . (a) List out the sample space of the experiment. (b) List the...
-
(Okay, so its between 1 and 12 days to sell the tickets, said John, but I think about 5 days is more likely. Everybody agree? The group nodded in unison and they all turned at once to the list of...
-
You can change the types of transactions included on reports in Classic view by clicking Customize and opening the _______________. Select one: a. Rows / Columns section b. Filter section c. Header /...
-
Determine the amount of the completed gift, if any, arising from each of the following occurrences. a. A parent sells real estate valued at $1.8 million to an adult child, who pays $1 million in...
-
Recently, Amur has joined a large UK company as a manager. His employment contracts provide him various benefits such as free accommodation, company car, free parking space, childcare benefit, etc....
-
What are the underlying reasons for the inclusion of racial categorization in population counts such as the U.S. census? Furthermore, what considerations might arise in discussions surrounding the...
-
Raspu Tin Inc. is considering a short term investment with the following cash flows. If the project's required return is 12 percent, what is the net present value? Year Cash Flow O -$35,600 1 12,450...
-
what contributed to the development of hip hop and how it affected society and/or other popular culture?
-
GridIron Company, a calendar year business, employs 75 employees. On December 1, 2023, it decided that it will pay bonuses to all its employees. Each employee will receive their $2,000 bonus on...
-
Calculate the future value of $2,000 in 10 years at an interest rate of 8% per year. $_____ (Round to the nearest dollar.)
-
describe the corporate culture. How does the culture impact the organization to help with gaining a competitive advantage? Also include if there are any social responsibility initiatives.
-
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?
-
The deletion rules for enforcing referential integrity include both Delete. Cascade and Delete Restrict In general, what criteria should a DBA use in deciding whether to use a Delete: Cascade or...
-
What is metadata? if database administrators need to define metadata, what kind of language should they use (DDL or DML)? Why?
-
What is a relational database?
Study smarter with the SolutionInn App