Short cases
Determine Oasis’s cost structure.
Use the information you learned in item (a) & prepare the income statement for the month of June using the variable cost-contribution margin approach.
How many units Oasis needs to sell to achieve the target operating income of $90,000 in the following month?
Define the term “relevant range” and explain its importance in understanding cost behavior.
KC Manufacturing, which began operations on January 1, 2021, produces an industrial scraper that sells for $325 per unit. By the end of 2021 KC Manufacturing provided the following Information.
KC carries its finished-goods inventory at the average unit cost of production. There was no work in process at year-end.Compute the company’s average unit cost of production.
Determine the cost of the December 31 Finished-Goods Inventory & Cost of Goods Sold.
If next year’s production increases to 23,000 units and general cost behavior patterns do not change, what is the likely effect on:
The direct-labor cost of $35 per unit? Why?
The fixed manufacturing overhead cost of $400,000? Why?
The following are relevant account balances from Brown’s comparative balance sheet and 2015 income statement.
Calculate depreciation expense for 2015.
Calculate the amount of dividends declared & paid during 2015.
Determine the cost of the equipment purchased during 2015.
Determine the change in current assets and current liabilities over the 2 years.
Calculate the sales revenues for the month April assuming a selling price of $15 a unit.
Calculate cost of goods sold & cost of ending inventories to be reported at the end of April.
Calculate the gross profit for the month of April.
It is the mid-day of April 30 and in few hours, you will be submitting a report of April Activities. You are concerned that you have not achieved you target gross profit for the month of April. Your accountant wanted to help and suggested that you may do that by returning the last purchase you made yesterday on April 28. Do you agree with her? Explain.