. Green Company makes calculators. During the most recent accounting period, Green paid $3,000 for raw...

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Accounting

. Green Company makes calculators. During the most recentaccounting period, Green paid $3,000 for raw materials, $5,000 forlabor, and $2,000 for overhead costs that were incurred to makecalculators. Green started and completed 10,000 calculators, ofwhich 8,000 were sold. Based on this information, how much expensewould Green recognize on the income statement?
(A) Which of the following transactions would cause net incomefor the period to be understated and explain why youranswer is correct – feel free to make-up numbers to help yourexplanation?
a. Misclassifying period cost and considering it productcost
b. Misclassifying product cost and considering it periodcost
c. All of the above
d. None of the above
EXPLAINATION:_________
(B) What is an upstream and downstream cost?Give an example of each that a bakery wouldhave:
(Upstream):

(Downstream)_
5. (A)
Number of Units:
2,000
4,000
Total Cost:
    Variable
$8,000
$16,000
    Fixed
$8,000
$8,000
Cost per unit:
    Variable
$4.00
(a)
    Fixed
$4.00
(b)
Looking at the table above, what is(a):      and     (b):
(B)
UNITS SOLD
100
200
300
400
Cost #1
$12 per unit
$6 per unit
$4 per unit
$3 per unit
Cost #2
$5 per unit
$5 per unit
$5 per unit
$5 per unit
Determine whether Cost #1 and Cost #2 is variable, fixed, ormixed and why
Cost #1:_. Why:___________________________________
Cost #2:_. Why:___________________________________________
6. Sales revenue (2,000 units * $50 per unit)
$100,000
Cost of goods sold:
     Variable (2,000 units * $20 perunit)
(40,000)
     Fixed
(9,000)
Gross Margin
51,000
Administrative Salaries
(13,000)
Sales office Depreciation
(4,000)
Sales supplies (2,000 units *$3 per unit)
(6,000)
NetIncome                                                                $28,000
Using the income statement above, if sales increased by 20%,
(1) What percent will net income increase? (2) How much will thenew net income be?

Answer & Explanation Solved by verified expert

4.1 Ratings (545 Votes)

1 Raw Materials 240000 labor 400000 Overhead 160000 Total 800000 A b Misclassifying product cost and considering it period cost It is because if the period cost is considered all the amount will be expensed however if See Answer

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Number of Units:	2,000	4,000
Total Cost:
Variable	$8,000	$16,000
Fixed	$8,000	$8,000
Cost per unit:
Variable	$4.00	(a)
Fixed	$4.00	(b)

	UNITS SOLD
	100	200	300	400
Cost #1	$12 per unit	$6 per unit	$4 per unit	$3 per unit
Cost #2	$5 per unit	$5 per unit	$5 per unit	$5 per unit

6. Sales revenue (2,000 units * $50 per unit)	$100,000
Cost of goods sold:
Variable (2,000 units * $20 perunit)	(40,000)
Fixed	(9,000)
Gross Margin	51,000
Administrative Salaries	(13,000)
Sales office Depreciation	(4,000)
Sales supplies (2,000 units *$3 per unit)	(6,000)