E1-1

E1-2
E1-3

E1-5
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1a. Direct materials per unit $7.00

Direct labor per unit 4.00
Direct manufacturing cost per unit $11.00
Number of units sold 20,000
Total direct manufacturing cost $220,000.00

1b. Variable manufacturing overhead per unit $1.50

Fixed manufacturing overhead per unit 5
Indirect manufacturing cost per unit $6.50
Number of units sold 20,000
Total indirect manufacturing cost $130,000.00

2a. Direct Material per unit $7.00

Direct Labor per unit $4.00
Variable Manufacturing Overhead per unit $1.50
Fixed manufacturing overhead per unit $5
Total Manufacturing cost per unit $17.50
Number of units sold $20,000.00
Total Direct Cost $350,000.00

2b. Total Indirect Costs $100,000.00

3a. Sales commissions per unit $1.00

Number of units sold 20000
Total sales commission $20,000.00
Fixed portion of sales representatives’ compensation $20,000
Total direct selling expense $40,000.00

3b. Total indirect selling expense $50,000.00

E1-12
1a. Number of Batteries bought 8,000
Number of Batteries withdrawn 7,600
Cost per Battery $80.00

Raw Materials Inventory = Number of batteries bought - Number of batteries withdrawn

 Raw Materials Inventory 400

Cost of Raw Materials = Raw Materials Inventory x Cost per Battery

Cost of Raw Materials $32,000.00

1b. Number of Batteries used in Production 7,500

Degree of Completion 90%
Work in Process Inventory 10%

Number of Batteries used in Production x Work in Process Inventory

750

Cost of Work in Process = Work in Process Inventory x Cost per Battery

$60,000.00

1c. Unsold Quantity 30%

Finsished Goods Inventory = Number of Batteries used in Production x Degree of Completion x Unsold Quan
2,025.00

Cost of Finished Goods = Finished Goods Inventory x Cost per Battery

$162,000.00

1d. Number of Batteries Sold = Number of Batteries used in Production - Work in Process Inventory - Finished G
4,725

Cost of Goods Sold = Number of Batteries Sold x Cost per Battery

$378,000.00

1e. Batteries used in travelling sales staff car 100

Selling Expense = Batteries used in travelling sales staff car x cost per battery
$8,000.00
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Direct materials
Direct labor
Variable manufacturing overhead
Fixed manufacturing overhead
Fixed selling expense
Fixed administrative expense
Sales commissions
Variable administrative expense

1. Total amount of Product Costs 20,000

Product Cost = Units sold * (Direct material + Direct labor + Variable man

Total Product cost $350,000.00

2. Total amount of period costs incurred

Period Costs Incurred = (Units sold * Variable manufacturing cost per un
Total Period Cost Incurred $150,000.00

3. Total amount of produc costs

Product Cost = (Units sold * Variable manufacturing cost per unit) + Tota
Total Product cost $375,000.00

4. Total amount of period costs incurred

Period Costs Incurred = (Units sold * Variable manufacturing cost per un
Total Period Cost Incurred $147,000.00
of Completion x Unsold Quantity

rocess Inventory - Finished Goods Inventory

 $7.00 Total Fixed Manufacturing Cost = Average Fixed manufacturing overhead * Number of unit
$4.00
$1.50
$5.00
$3.50
$2.50
$1.00
$0.50

l + Direct labor + Variable manufacturing overhead)

20,000
ble manufacturing cost per unit) + Total fixed selling and administrative expense

22,000
ufacturing cost per unit) + Total fixed manufacturing cost

18,000
ble manufacturing cost per unit) + Total fixed selling and administrative expense
ng overhead * Number of units Produced
E1-15
Requirement 1
Sales $150,000
Cost of Good Sold $90,000 ($30,000 + $100000 – $40,000)
Gross Margin $60,000
Selling Expenses $30,000 (($50 per unit × 200 pairs of skis*) + $20,000)
Administrative Expenses $22,000 (($10 per unit × 200 pairs of skis*) + $20,000)

Total Selling and Administrative Expense $52,000

Net Operating Income $8,000

Sales $150,000
Variable Expenses
Cost of Good Sold $90,000 ($30,000 + $100000 – $40,000)
Selling Expenses $10,000 (($50 per unit × 200 pairs of skis*)
Administrative Expenses $2,000 (($10 per unit × 200 pairs of skis*)

$102,000
Contribution Margin $48,000
Selling Expenses $20,000
Administrative Expenses $20,000
$40,000

Net Operating Income $8,000

Skis Sold 200 (150,000/750)

Requirement 3
Contribution Margin Per Unit $240 ($48,000/200= $240)

E1-17
P1-23
s of skis*) + $20,000)
s of skis*) + $20,000)