Fast Track motors assembles and sells motor vehicles and uses standard costing. Actual data relating to April and May 2017 are as follows:
April May
Unit data:
Beginning inventory 0 100
Production 700 650
Sales 600 700
Variable costs:
Manufacturing cost per unit produced $9,500 $9,500
Operating (marketing) cost per unit sold $2,400 $2,400
Fixed costs:
Manufacturing costs $2,100,000 $2,100,000
Operating (marketing) costs $650,000 $650,000
The selling price per vehicle is $27,000.
The budgeted level of production used to calculate the budgeted fixed manufacturing cost per unit is 70 units.
There are no price, efficiency or spending variances.
Any production- volume variance is writtin off to cost of goods sold in the month in which it occurs.
Required:
1) Prepare April and May income statements under variable costing.
April May
Revenues
Variable cost of goods sold
Beginning inventory
Variable manufacturing costs
Cost of goods available for sale
Deduct ending inventory
Variable cost of goods sold
Variable operating costs
Contribution margin
Fixed manufacturing costs
Fixed operating costs
Operating income
2) Prepare April and May under absorption costing.
April May
Revenues
Cost of goods sold
Beginning inventory
Variable manufacturing costs
Fixed manufacturing costs
Cost of goods available for sale
Deduct ending inventory
Adjustment for production-volume variance
Gross margin
Operating income

Gino's restaurant is a popular restaurant in boston, massachusetts. the owner of the restaurant has been trying to better understand costs at the restaurant and has hired a student intern to conduct an activity-based costing study. the intern, in consultation with the owner, identified the following major activities: activity cost pool activity measure serving a party of diners number of parties served serving a diner number of diners served serving drinks number of drinks ordered some costs, such as the cost of cleaning the linens that cover the restaurant's tables, vary with the number of parties served. other costs, such as washing plates and glasses, depends on the number of diners served or the number of drinks served. data concerning these activities are shown below. serving a party serving a dinner serving drinks total total cost $47,600 $153,000 $59,800 $260,400 total activity 7,000 parties 30,000 diners 46,000 drinks prior to the activity-based costing study, the owner knew very little about the costs of the restaurant. she knew that the total cost for the month was $260,400 and that 30,000 diners had been served. therefore, the average cost per diner was $8.68.required: 1. compute the activity rates for each of the three activities 2. according to the activity-based costing system, what is the total cost of serving each of the following parties of diners? a. a party of four diners who ordered three drinks in total b. a party of two diners who do not order any drinks c. a lone diner who orders two drinks 3. convert the total costs you computed in part (1) above to costs per diner. in other words, what is the average cost per diner for serving each of the following parties: a. a party of four diners who order three drinks in total b. a party of two diner who do not order any drinks c. a lone diner who orders two drinks 4. why do the costs per diner for the three different parties differ from each other and from the overall average coast of $9.80 per diner?

Magic realm, inc., has developed a new fantasy board game. the company sold 15,000 games last year at a selling price of $20 per game. fixed expenses associated with the game total $182,000 per year, and variable expenses are $6 per game. production of the game is entrusted to a printing contractor. variable expenses consist mostly of payments to this contractor.required: 1-a. prepare a contribution format income statement for the game last year.1-b. compute the degree of operating leverage.2. management is confident that the company can sell 58,880 games next year (an increase of 12,880 games, or 28%, over last year). given this assumption: a. what is the expected percentage increase in net operating income for next year? b. what is the expected amount of net operating income for next year? (do not prepare an income statement; use the degree of operating leverage to compute your answer.)

On april 1, santa fe, inc. paid griffith publishing company $2,448 for 36-month subscriptions to several different magazines. santa fe debited the prepayment to a prepaid subscriptions account, and the subscriptions started immediately. what amount should appear in the prepaid subscription account for santa fe, inc. after adjustments on december 31 of the first year assuming the company is using a calendar-year reporting period and no previous adjustment has been made?