An analysis of the accounts of Chamberlin Manufacturing reveals the following manufacturing cost data for the month ended June 30, 2008.

Inventories Beginning Ending

Raw materials $9,000 $13,100

Work in process 5,000 7,000

Finished goods 9,000 6,000

Costs incurred: Raw materials purchases $54,000, direct labor $57,000, manufacturing overhead $19,900. The specific overhead costs were: indirect labor $5,500, factory insurance $4,000, machinery depreciation $4,000, machinery repairs $1,800, factory utilities $3,100, miscellaneous factory costs $1,500. Assume that all raw materials used were direct materials.


(a) Prepare the cost of goods manufactured schedule for the month ended June 30, 2008.

(b) Show the presentation of the ending inventories on the June 30, 2008, balance sheet.


Bjerg Company specializes in manufacturing a unique model of bicycle helmet. The model is well accepted by consumers, and the company has enough orders to keep the factory production at 10,000 helmets per month (80% of its full capacity). Bjerg s monthly manufacturing cost and other expense data are as follows.

Rent on factory equipment $ 7,000

Insurance on factory building 1,500

Raw materials (plastics, polystyrene, etc.) 75,000

Utility costs for factory 900

Supplies for general office 300

Wages for assembly line workers 43,000

Depreciation on office equipment 800

Miscellaneous materials (glue, thread, etc.) 1,100

Factory manager s salary 5,700

Property taxes on factory building 400

Advertising for helmets 14,000

Sales commissions 7,000

Depreciation on factory building 1,500


Black Brothers Furniture Corporation incurred the following costs. Classify variable, fixed, and mixed costs.

1. Wood used in the production of furniture.

2. Fuel used in delivery trucks.

3. Straight-line depreciation on factory building.

4. Screws used in the production of furniture.

5. Sales staff salaries.

6. Sales commissions.

7. Property taxes.

8. Insurance on buildings.

9. Hourly wages of furniture craftsmen.

10. Salaries of factory supervisors.

11. Utilities expense.

12. Telephone bill.


Identify the costs above as variable, fixed, or mixed.


Utech Company bottles and distributes Livit, a diet soft drink. The beverage is sold for 50 cents per 16-ounce bottle to retailers, who charge customers 75 cents per bottle. For the year 2008, management estimates the following revenues and costs.

Prepare a CVP income statement, compute break-even point, contribution margin ratio, margin of safety ratio, and sales for target net income.

Net sales $1,800,000

Direct materials 430,000

Direct labor 352,000

Manufacturing overhead variable 316,000

Manufacturing overhead fixed 283,000

Selling expenses variable $70,000

Selling expenses fixed 65,000

Administrative expenses variable 20,000

Administrative expenses fixed 60,000


(a) Prepare a CVP income statement for 2008 based on management s estimates.

(b) Compute the break-even point in (1) units and (2) dollars.

(c) Compute the contribution margin ratio and the margin of safety ratio. (Round to full percents.)

(d) Determine the sales dollars required to earn net income of $238,000.