Family Furniture Corporation incurred the following costs.

1. Wood used in the production of furniture.
2. Fuel used in delivery trucks.
3. Straight-line depreciation on factory building.
4. Screws used in the production of furniture.
5. Sales staff salaries.
6. Sales commissions.
7. Property taxes.
8. Insurance on buildings.
9. Hourly wages of furniture craftsmen.
10. Salaries of factory supervisors.
11. Utilities expense.
12. Telephone bill.

Instructions Identify the costs above as variable, fi xed, or mixed.

For Astoria Company, actual sales are $1,000,000, and break-even sales are$800,000. Compute (b) the margin of safety ratio.

For Lodes Company, the relevant range of production is 40–80% of capacity. At 40% of capacity, a variable cost is $4,000 and a fi xed cost is$6,000. Diagram the behavior of each cost within the relevant range assuming the behavior is linear.

Bonita Company manufactures a single product. Annual production costs incurred in the manufacturing process are shown below for two levels of production.

Instructions (a) Define the terms variable costs, fi xed costs, and mixed costs.

Use logarithmic differentiation to find the derivative of the function.

$$y=x^x$$

Lawnco produces three grades of commercial fertilizers. A $100$-lb bag of grade A fertilizer contains $18 \mathrm{lb}$ of nitrogen, $4 \mathrm{lb}$ of phosphate, and $5 \mathrm{lb}$ of potassium. A $100$-lb bag of grade B fertilizer contains $20 \mathrm{lb}$ of nitrogen and $4 \mathrm{lb}$ each of phosphate and potassium. A $100$-lb bag of grade C fertilizer contains $24 \mathrm{lb}$ of nitrogen, $3 \mathrm{lb}$ of phosphate, and $6 \mathrm{lb}$ of potassium. How many $100$-lb bags of each of the three grades of fertilizers should Lawnco produce if $26,400 \mathrm{lb}$ of nitrogen, $4900 \mathrm{lb}$ of phosphate, and $6200 \mathrm{lb}$ of potassium are available and all the nutrients are used?

Nitrogen (N), phosphorus (P), and potassium (K) are the main nutrients in plant fertilizers. By industry convention, the numbers on the label refer to the mass percents of N, P2O5 and K2O in that order. Calculate the N/P/K ratio of a 30/10/10 fertilizer in terms of moles of each element, and express it as x/y/1.0

A company applies overhead at a rate of 150% of direct labor cost. Actual overhead cost for the current period is $950,000, and direct labor cost is$600,000. Prepare the journal entry to close over- or underapplied overhead to Cost of Goods Sold.

Vigor Inc. produces an energy drink. The product is sold by the quart. The company has two departments: mixing and bottling. For May, the bottling department had 30,000 quarts in beginning inventory (with transferred-in costs of $63,000) and completed 140,000 quarts during the month. Further, the mixing department completed and transferred out 120,000 gallons at a cost of$237,000 in May.

1. Prepare a physical flow schedule for the bottling department.

2. Calculate equivalent units for the transferred-in category.

3. Calculate the unit cost for the transferred-in category.

Powers Inc. produces a protein drink. The product is sold by the gallon. The company has two departments: mixing and bottling. For August, the bottling department had 70,000 gallons in beginning inventory (with transferred-in costs of $283,000 ) and completed 262,500 gallons during the month. Further, the mixing department completed and transferred out 240,000 gallons at a cost of$957,000 in August.

1. Prepare a physical flow schedule for the bottling department.

2. Calculate equivalent units for the transferred-in category.

3. Calculate the unit cost for the transferred-in category.

Washburn Company produces earbuds. During the year, manufacturing overhead costs are expected to be $200,000. Expected machine usage is 2,500 hours. The company assigns overhead based on machine hours. Job No. 551 used 90 machine hours. Compute the predetermined overhead rate, determine the amount of overhead to allocate to Job No. 551, and prepare the entry to assign overhead to Job No. 551 on January 15.

Which of the following is correct regarding cost systems?

The Coca-Cola Company hardly needs an introduction. A line taken from the cover of a recent annual report says it all: If you measured time in servings of Coca-Cola, “a billion Coca-Cola’s ago was yesterday morning.” On average, every U.S. citizen drinks 363 8-ounce servings of Coca-Cola products each year. Coca-Cola’s primary line of business is the making and selling of syrup to bottlers. These bottlers then sell the fi nished bottles and cans of Coca-Cola to the consumer. In the annual report of Coca-Cola, the information shown below was provided.

Our gross margin declined to 61 percent this year from 62 percent in the prior year, primarily due to costs for materials such as sweeteners and packaging. The increases [in selling expenses] in the last two years were primarily due to higher marketing expenditures in support of our Company’s volume growth. We measure our sales volume in two ways: (1) gallon shipments of concentrates and syrups and (2) unit cases of finished product (bottles and cans of Coke sold by bottlers)

Instructions Answer the following questions. (a) Are sweeteners and packaging a variable cost or a fixed cost? What is the impact on the contribution margin of an increase in the per unit cost of sweeteners or packaging? What are the implications for profitability?

The Cutting Department of Cassel Company has the following production and cost data for July.

Materials are entered at the beginning of the process. Conversion costs are incurred uniformly during the process.

Instructions (a) Determine the equivalent units of production for (1) materials and (2) conversion costs.