1. Inventory Valuation under Absorption Costing During the most recent year, Judson Company had the following data associated with the product it
1.
Inventory Valuation under Absorption
Costing
During the most recent year, Judson Company had the
following data associated with the product it makes:
Units
in beginning inventory
300
Units
produced
14,000
Units
sold ($300 per unit)
12,700
Variable
costs per unit:
Direct
materials
$20
Direct
labor
$60
Variable
overhead
$13
Fixed
costs:
Fixed
overhead per unit produced
$30
Fixed
selling and administrative
$140,000
Required:
1. How many
units are in ending inventory? _________________ units 2. Using absorption costing, calculate the per-unit product cost. $ _________________ per unit 3. What is the value of ending inventory under absorption costing? $ _________________ |
2.
Inventory Valuation under Variable Costing
During the most recent year, Judson Company had the
following data associated with the product it makes:
Units
in beginning inventory
300
Units
produced
14,000
Units
sold ($300 per unit)
12,700
Variable
costs per unit:
Direct
materials
$20
Direct
labor
$60
Variable
overhead
$10
Fixed
costs:
Fixed
overhead per unit produced
$30
Fixed
selling and administrative
$140,000
Required:
1. How many
units are in ending inventory? _________________ units 2. Using variable costing, calculate the per-unit product cost. $ _________________ per unit 3. What is the value of ending inventory under variable costing? $ _________________ |
3.
Absorption-Costing Income Statement
During the most recent year, Osterman Company had the following data:
Units in beginning inventory | — |
Units produced | 10,000 |
Units sold ($47 per unit) | 9,200 |
Variable costs per unit: | |
Direct materials | $9 |
Direct labor | $6 |
Variable overhead | $4 |
Fixed costs: | |
Fixed overhead per unit produced | $5 |
Fixed selling and administrative | $138,000 |
Required:
1.
Calculate the cost of goods sold under
absorption costing.
$ _________________
6.
Ordering Cost, Carrying Cost, and Total Inventory-Related
Cost
La Cucina Company sells kitchen supplies and housewares.
Lava stone is used in production of molcajetes (mortars and pestles used in
the making of guacamole) and is purchased from external suppliers. Each year,
9,500 pounds of lava stone is used; it is currently purchased in lots of 500
pounds. It costs La Cucina $5 to place the order, and carrying cost is $2 per
pound per year.
Required:
1. How many
orders for lava stone does La Cucina place per year? Round your answer to the
nearest whole amount. _________________ orders per year 2. What is the total ordering cost of lava stone per year? $ _________________ 3. What is the total carrying cost of lava stone per year? $ _________________ 4. What is the total cost of La Cucina’s inventory policy for lava stone per year? $ _________________ |
7.
Economic Order Quantity
La Cucina Company sells kitchen supplies and housewares.
Lava stone is used in production of molcajetes (mortars and pestles used in
the making of guacamole) and is purchased from external suppliers. Each year,
8,200 pounds of lava stone is used; it is currently purchased in lots of 500
pounds. It costs La Cucina $6 to place the order, and carrying cost is $2 per
pound per year.
Required:
1. What is
the EOQ for lava stone? Round your answer to the nearest whole pound. _________________ pounds 2. How many orders per year for lava stone will La Cucina place under the EOQ policy? Round your answer to the nearest whole order. _________________ orders per year 3. What is the total annual ordering cost of lava stone for a year under the EOQ policy? Round your answer to the nearest dollar. $ _________________ 4. What is the total annual carrying cost of lava stone per year under the EOQ policy? Round your answer to the nearest dollar. $ _________________ 5. What is the total annual inventory-related cost for lava stone under the EOQ? $ _________________ |
8.
Reorder Point
La Cucina Company sells kitchen supplies and housewares.
Lava stone is used in production of molcajetes (mortars and pestles used in
the making of guacamole) and is purchased from external suppliers. Each year,
8,000 pounds of lava stone is used; it is used evenly at the rate of 28
pounds per day. It takes La Cucina 7 days from the time of order to the time
of arrival of the order.
Required:
Calculate the reorder point. _________________ pounds |
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