P21-4A

a) Equivalent Units
Quantity Units Materials Conservation Costs
Units to be accouted for
Work in Process, Nov 1 35000
Started into production 660000
Total units 695000
Units accounted for
Transferred out ($695000 - $25000) 670000 670000
Work in process, Nov 30 25000
25000 x 100% 25000
25000 x 40%
Total units 695000 695000

Costs Materials Conservation Costs

Beginning work $79,000 $48,150
In process 1,589,000 563,850
Added during month $1,668,000 $612,000
Total Costs 695000 680,000
Equivalent Units $2,4 $0,9
Units costs

b)
Cost Reconcilliation Schedule Conservation Costs
Costs accounted for
Transferred out (670000 x $3,3)
 Work in progress, Nov 30
Materials (25000 x $2,4) $60,000
Conversion costs (10000 x $0,9) 9,000
Total costs

c)
Equivalent Units
Quantity Units Materials Conservation Costs
Units to be accouted for
Work in Process, Nov 1 35000
Started into production 660000
Total units 695000
Units accounted for
Transferred out ($695000 - $25000) 670000 670000
Work in process, Nov 30 25000
25000 x 100% 25000
25000 x 40%
Total units 695000 695000

Costs Materials Conservation Costs

Units costs
Costs in Nov $1,668,000
Equivalent Units 695000
Units costs $2,4
Costs to be accounted for
Work in process, Nov 1
Started into production
Total costs

Cost Reconcilliation Schedule Conservation Costs

Costs accounted for
Transferred out (670000 x $3,3)
Work in progress, Nov 30
Materials (25000 x $2,4)
Conversion costs (10000 x $0,9)
Total costs

P21-5A
 1 Equivalent Units
Quantity Units Materials Conservation Costs
Units to be accouted for
Work in Process, July 1 500
Started into production 1000
Total units 1,500
Units accounted for
Transferred out 900 900
Work in process, July 31 600 600
Total units 1,500 1,500

2
Costs Materials Conservation Costs
Beginning work
In process 750 600
Added during month $2,400 $2,820
Total Costs $3,150 3,420
Equivalent Units 1,500 1,140
Units costs $2,1 $3,0

3
Cost Reconcilliation Schedule Conservation Costs
Costs accounted for
Transferred out (900 x ($2,1 + $3)
Work in progress, July 31
Materials (600 x $2,1) $1,260
Conversion costs (240 x $3) 720
Total costs

b)

Polk Company
Production Cost Report
For the month ended July 31, 2020
Equivalent Units
Quantity Units Materials Conservation Costs
Units to be accouted for
Work in Process, July 1 500
Started into production 1000
Total units 1,500
Units accounted for
Transferred out 900 900
Work in process, July 31 600 600
Total units 1,500 1,500

Costs Materials Conservation Costs

Units costs
Total costs $3,150
Equivalent Units 1,500
Units costs $2,1
Costs to be accounted for
Work in process, July 1
Started into production
Total costs

Cost Reconcilliation Schedule Conservation Costs

Costs accounted for
Transferred out (900 x ($2,1 + $3)
Work in progress, July 31
Materials (600 x $2,1)
Conversion costs (240 x $3)
Total costs
lent Units
Conservation Costs

670000

10000
680000

Total

$2,280,000

$3,3

Total

$2,211,000
 69,000
$2,280,000

lent Units
Conservation Costs

670000

10000
680000

Conservation Costs Total

$612,000 $2,280,000
680,000
$0,9 $3,3

$127,150
2,152,850
$2,280,000

Conservation Costs Total

$2,211,000

$60,000
9,000 69,000
$2,280,000
lent Units
Conservation Costs

900
240
1,140

Total

$4,590

1,980
 $6,570

lent Units
Conservation Costs

900
240
1,140

Conservation Costs Total

3,420 $6,570
1,140
$3,0 $5,1

$1,350
5,220
$6,750

Conservation Costs Total

$4,590

$1,260
720 1,980
$6,570
a)
Jorge Company
CPV Income Statement
For the year ended december 31, 2023
Total Per unit
Sales $1,800,000
Variable expenses
Direct materials $430,000
Direct labour 360,000
Manufacturing overhead 380,000
Selling expenses 70,000
Administrative expenses 20,000
Total variable costs 1,260,000
Contribution Margin 540,000

Fixed costs
Manufacturing overhead 280,000
Selling expenses 65,000
Administrative expenses 60,000
Total variable costs 405,000
Net Income $135,000

b)
1) Variable cost per bottle = Sale price per unit x (Variable
expense)/Sales
=$0,5
×$1,260,000/$1,8
00,000
=$0,35

we have equation:
0,5X - 0,35X = 405000
à X = 2,700,000 bottles
So break-even point is 2,700,000 bottles
Break-even point in dollars = 2700000 x 0,5 = $1350000

c)
Contribution margin Ration =(Sales − Variable Expense)/Sales

=($1800000 −$1260000)/$1800000
=30%

d)
(Fixed expense+ Targeted net income)/(Contribution margin ratio)
Required Sales =

=($405,000+$180,000)/0,3

=$1,950,000

P22.3A
a)
(Sales − Variable Expense)/Sales
Contribution margin ratio =

=($2,500,000+$1,750,000)/$2,500,000
=30%

=(Fixed costs)/(Contribution margin ratio)

Break-even point

=$850,000/0,3
=$2,833,333

b)
Break even point for alternative
Alternative 1: Increase the selling price per unit to $5 x 120= $6. So the new sale price become 500000 x $6 = $3000000
New contribution margin=($3000000
ratio −$1,750,000)/$3,000,000

=42%
=(Fixed costs)/(Contribution margin ratio)
New break - even point in dollars

=$850000/0,42 =$2,023,810

Alternative 2: Fixed costs change to $850000 - ($150000 - $60000) = $760000.

Variable cost change to $1,750,000 + $2,500.000 x 5% = $1,875,000
New contribution margin=($2,500,000
ratio −$1,875,000)/$2,500,000

=25%
=(Fixed costs)/(Contribution margin ratio)
 =(Fixed costs)/(Contribution margin ratio)
New break - even point in dollars

=760000/0,25 =$3,040,000

Alternative 1 has a lower break-even point. So alternative 1 is recommended to course of action.

0 x $6 = $3000000