Answer the 3 questions in Managerial Accounting

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Question 1: Cost flows, income statemen

You own a store. Beginning inventory on January 1 was $7,000. Ending inventory on December 31 was $7,500. You purchased $23,000 of new merchandise during the year. Sales revenue for the year was $46,000. Selling, general, and administrative (SG&A) costs for the year were $4,000.
a) Compute the cost of goods sold (COGS) for the year.


b) Prepare the income statement for the year.
Revenue46000
COGS
Gross Margin
SG&A costs4000
Profit


____________


Question 2: Cost structure estimation



Cost accountAmountFixed or variable?
direct labor$8,000variable
direct materials$8,000variable
depreciation$8,000Fixed
rent$9,000Fixed
administrative staff salaries$7,000Fixed
Production volume was 200 units.



a) Which cost structure estimation method should we use?

B) Estimate the cost structure parameters:
total FC=$ = _______

unit VC=$ =_________
Write down the total cost equation:
TC = + * volume

(e.g., if TC=500+2*volume, enter 500 in the first box and 2 in the second box)


d) Predict the total cost of producing 250 units:

_____________________________________________

Question 3: Cost structure estimation

monthactivity volume
in units
total costs
Oct90$6,230
Nov70$6,300
Dec105$7,700


a) Which cost structure estimation method should we use?

b) To identify the low and high points, we should look for lowest/highest activiti


c) Estimate the cost structure parameters:
total FC=
unit VC=
Write down the total cost equatio
TC = + * volume



d) Predict the total costs of producing 90 units:
TC =


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