6-19. Six sites have been identified for a parking lot in downtown Blacksburg. Because the sites are plots of land, their salvag

Answer:

Ending inventory cost for April is equal to $121,875

Explanation:

Based on the information provided in the question:

Unit production cost       Absorption cost       Variable cost

Direct material                     $15                              $15

Direct labor                            10                                10  

Variable factory overhead    7.5                              7.5  

Fixed factory overhead          5

Total cost                               $37.5                       $32.5  

Finished goods inventory calculation results in 12,500 - 8,750 = 3,750

The cost of the finished goods inventory calculated using absorption costing = 3,750 × $37.50

= $140,625

The finished goods inventory cost using variable costing  = 3,750 × $32.50

= $121,875

Answer and Explanation:

The calculation is detailed below:

1. Given that    

The break-even point is 115000 units  

Fixed cost = $349,600  

As we know that  

The Contribution Margin (CM) per unit is

=  Fixed cost  ÷  Break even units  

= $349,600  ÷ 115,000

= 3.04 per unit  

Next

Selling price = Variable cost  +CM per unit

= $4.56 + $3.04

= $7.60 per unit  

2. Given that

Net Income at 15600 units is $166,000  

Fixed cost = $458,000  

So,  

Contribution is

= $458,000 + $166,000

= $624,000  

Now

CM per unit is

= $624,000  ÷ 15,600

= 40 per unit  

The selling price per unit is: 120  

Thus,  

Variable cost per unit is

= $120 - 40

= 80 per unit  

And,

CM ratio is

= CM per unit ÷ Selling price per unit  

= $40 ÷ 120 × 100

= 33.33%  

3. Given that      

Net Operating income = $22,500    

CM ratio = 25%    

Actual revenue = $235,000  

Therefore,  

Contribution earned is

= $235,000 × 25%

= $58,750  

Now

Fixed cost = Contribution - Net income  

= $58,750 - $22,500

=$36,250  

4. Given that      

Variable cost ratio = 56%    

Fixed cost = $103,840    

Break even units= 23600 units

Thus,    

CM per unit is

= $103,840 ÷ 23,600

=$4.40  

CM ratio = 100 - 56% = 44%

And the selling price per unit is

=$4.40 ÷ 44%

=$10 per unit  

Now

Variable cost per unit is

=$10 × 56%

=$5.60 per unit  

And,

Contribution per unit is

= $10 × 44%

=$4.40 per unit

Answer:

option A is the correct choice

Paid-In Capital in Excess of Par will receive a credit of $150,000

Explanation:

Details provided:

shares = 5000

share price = $5 / common stock

cash received = $175000

Now, we need to determine which option is correct

solution

We know we have a cash value of $175,000;

the total common stock is calculated as follows = shares × share price

Total common stock = 5000 × 5

Total common stock value = $25000

Thus, paid capital in excess = cash - total common stock value

Paid capital in excess = 175000 - 25000

Paid capital in excess is $150000

Thus, option A is correct

Paid-In Capital in Excess of Par will be credited for $150,000