# Work Shown

Atlantic Company produces a single product. For the most  recent year, the company’s net operating income computed by the absorption costing method was \$7,800, and its net operating income computed by the variable costing method was \$10,500. The company’s unit product cost was \$15 under variable costing and \$24 under absorption costing.  If the ending inventory consisted of 1,460 units, how many units must have been in the beginning inventory.

Black Company uses the weighted-average method in its process costing system. The company’s ending work-inprocess inventory consists of 6,000 units, 75 percent complete with respect to materials and 50 percent complete with respect to labor and overhead. If the total  dollar value of the inventory is \$80,000 and the cost per equivalent unit for labor and overhead is \$6.00, what is the cost per equivalent unit for materials?
Total Value = Equivalent units for Material* cost per equivalent unit for materials + Equivalent units for Labor* cost per equivalent unit for Labor & OH

At Overland Company, maintenance cost is exclusively a variable cost that varies directly with machine-hours. The performance report for July showed that actual maintenance costs totaled \$11,315 and that the associated rate variance was \$146 unfavorable. If 7,300 machine-hours were actually worked during July, what is the budgeted maintenance cost per machine-hour?

Denny Corporation is considering replacing a technologically  obsolete machine with a new state-of-the-art  numerically controlled machine. The new machine would cost \$600,000 and would have a 10-year useful life. Unfortunately, the new machine would have no salvage value. The new machine would cost \$20,000 per year to  operate and maintain, but would save \$125,000 per year in labor and other costs. The old machine can be sold now for scrap for \$50,000. What percentage is the simple rate of return on the new machine rounded to the nearest tenth of a percent? (Ignore income taxes in this problem.)

Harwichport Company has a current ratio of 3.0 and an acid-test ratio of 2.8. Current assets equal \$210,000, of which \$5,000 consists of prepaid expenses. The remainder of current assets consists of cash, accounts receivable, marketable securities, and inventory. What is the amount of Harwichport Company’s inventory?

Trauscht Corporation has provided the following data from its activity-based costing system:
Activity Cost Pool      Total Cost                               Total Activity
Assembly                    \$704,880                                 44,000 machine-hours
Processing orders       \$91,428                                  1,900 orders
Inspection                   \$117,546                                 1,950 inspection-hours
The company makes 360 units of product P23F a year, requiring a total of 725 machine-hours, 85 orders, and 45 inspection-hours per year. The product’s direct materials cost is \$42.30 per unit and its direct labor cost is \$14.55 per unit. The product sells for \$132.10 per unit. According to the activity-based costing system, what is the product margin for product P23F?

In a recent period, 13,000 units were produced, and there was a favorable labor efficiency variance of \$23,000. If 40,000 labor-hours were worked and the standard wage rate was \$13 per labor-hour, what would be the standard hours allowed per unit of output?

The balance in White Company’s work-in-process inventory account was \$15,000 on August 1 and \$18,000 on August 31. The company incurred \$30,000 in direct labor cost during August and requisitioned \$25,000 in raw materials (all direct material). If the sum of the debits to the manufacturing overhead account total \$28,000 for the month, and if the sum of the credits totaled \$30,000, then was Finished Goods debited or credited? By how much?
Activity Cost Pool      Total Cost                               Total Activity
Assembly                    \$704,880                                 44,000 machine-hours
Processing orders       \$91,428                                  1,900 orders
Inspection                   \$117,546                                 1,950 inspection-hours

A company has provided the following data:
Sales 4,000 units
Sales price \$80 per unit
Variable cost \$50 per unit
Fixed cost \$30,000
If the dollar contribution margin per unit is increased by 10 percent, total fixed cost is decreased by 15 percent, and all other factors remain the same, will net operating income increase or decrease? By how much?

For the current year, Paxman Company incurred \$175,000 in actual manufacturing overhead cost. The manufacturing overhead account showed that overhead was overapplied in the amount of \$9,000 for the year. If the predetermined overhead rate was \$8.00 per direct labor-hour, how many hours were worked during the year?