Months Unit sold Cost of outsourced ervices Total Cost

1 4,000 15.000 60,000

2 5,000 17.000 85,000
3 6,500 19.400 126,100
4 8,000 21.800 174,400
5 7,000 20.000 140,000
6 5,500 18.200 100,100
7 5,200 18.000 93,600
8 7,300 21.500 156,950
9 6,800 19.800 134,640

8,000 21.8 174,400

.
Highest Activity Cost 174,400
Highest Activity Units 8,000
Lowest Activity Cost 60,000
Lowest Activity Units 4,000

Variable Cost Per Unit is calculated using the formula gi

Variable Cost Per Unit = (Highest Activity Cost - Lowest A
(174400-60000)/(8000-4000)
Variable Cost Per Unit 28.60
For Lowest Activity
Fixed Cost is calculated using the formula given below
Fixed Cost =Highest Activity Cost - (Variable Cost Per Un
(174,400-(28.6*8000)
Fixed Cost -54,400.00
 Months
1
2
3
4
5
6
7
8
9
Sum
Mean

114400

1803.75
3210
-1406.25

alculated using the formula given below

Highest Activity Cost - Lowest Activity Cost) /(Highest Activity Units - Lowest Activity Units)
74400-60000)/(8000-4000)
ing the formula given below
ty Cost - (Variable Cost Per Units* Highest Activity Units)
74,400-(28.6*8000)
Unit sold (X) Cost of outsourced ervices Total Cost (Y) X*Y X^2
4,000 15.000 60,000 240,000,000 16000000
5,000 17.000 85,000 425,000,000 25000000
6,500 19.400 126,100 819,650,000 42250000
8,000 21.800 174,400 1,395,200,000 64000000
7,000 20.000 140,000 980,000,000 49000000
5,500 18.200 100,100 550,550,000 30250000
5,200 18.000 93,600 486,720,000 27040000
7,300 21.500 156,950 1,145,735,000 53290000
6,800 19.800 134,640 915,552,000 46240000
55,300 171 1,070,790 6,958,407,000 353,070,000
6,144 118,977

59,567,572,981.37
 a) Specific identification method
Purchase COGS Inventory balance
Date
Units Per unit cost Total Units Per unit cost Total Units Per unit cost Total
1-Aug 12 $16 $192
3-Aug 4 $16 $64 8 $16 $128
12-Aug 8 $18 $144 8 $16 $128
8 $18 $144
16 $272
15-Aug 6 $16 $96 2 $16 $32
5 $18 $90 3 $18 $54
5 $86
20-Aug 3 $25 $75 2 $16 $32
3 $18 $54
3 $25 $75

8 $161
28-Aug 2 $18 $36 2 $16 $32
2 $25 $50 1 $18 $18
1 $25 $25
Total 11.00 $219 19.00 $336 4 $75

b) FIFO Method
Purchase COGS Inventory balance
Date
Units Per unit cost Total Units Per unit cost Total Units Per unit cost Total
1-Aug 12 $16 $192
3-Aug 4 $16 $64 8 $16 $128
12-Aug 8 $18 $144 8 $16 $128
8 $18 $144
16 $272
15-Aug 8 $16 $128
3 $18 $54 5 $18 $90
5 $90
20-Aug 3 $25 $75 5 $18 $90
3 $25 $75
8 $165
28-Aug 4 $18 $72 1 $18 $18
3 $25 $75
Total 11.00 $219 19.00 $318 4 $93

c) LIFO Method
Purchase COGS Inventory balance
Date
Date
Units Per unit cost Total Units Per unit cost Total Units Per unit cost Total
1-Aug 12 $16 $192
3-Aug 4 $16 $64 8 $16 $128
12-Aug 8 $18 $144 8 $16 $128
8 $18 $144
16 $272
15-Aug 8 $18 $144
3 $16 $48 5 $16 $80
5 $80
20-Aug 3 $25 $75 5 $16 $80
3 $25 $75
8 $155
28-Aug 3 $25 $75 4 $16 $64
1 $16 $16
Total 11.00 $219 18.00 $347 4 $64

d) Weighted Method
Purchase COGS Inventory balance
Date
Units Per unit cost Total Units Per unit cost Total Units Per unit cost Total
1-Aug 12 $16 $192
3-Aug 4 $16 $64 8 $16 $128
12-Aug 8 $18 $144 8 $16 $128
8 $18 $144
16 $17 $272
15-Aug 11 $17 $187 5 $17 $85
5 $17 $85
20-Aug 3 $25 $75 5 $17 $85
3 $25 $75
8 $20 $160
28-Aug 4 $20 $80 4 $20 $80
Total 11.00 $219 19.00 $331 4 $80
Heavenly Books Com
 Specific Weighted
Heavenly Books CompanyIdentification FIFO LIFO Average
Method Method

Ending Inventory cost $75 $93 $64 $80

Cost of Goods Sold $336 $318 $347 $331
Particulars Amount($) Amount($)
Andy's salary 50,000
Marcia's salary 42,000
Gross salary 92,000
Add: Dividend income 950
AGI 92,950
Less: Deduction for AGI
Andy's contribution to an IRA (assume IRA is deductible for AGI) -2000
AGI 90,950
Less: Itemize deduction or standard deduction whichever is higher 41,480
$41480 or $25900
Taxable income 49,470
Tax on taxable income (2055+(12%*(49470-20550)) 5,525
Less: Federal income tax withheld (4000+3500) 4,000
Tax payable 1,525

Itemize deduction:
Particulars Amount($)
Eyeglasses for one of the children 175
Union dues 480
Fee for preparation of tax returns 125
Real property taxes on the residence 6,300
State income taxes 5,800
Interest on home mortgage 12,800
Premiums for health insurance 2,600
Medical expenses 13,200
Total 41,480
 6821.25 6378.75

Particulars Amount Amount

Total income(50,000+42,000) 92,000
Add:- Dividends 950
Less:- Deduction for AGI -2000 6821.25 4105
AGI 90,950
Less: Higher of Standard or Itemized deduction -32,480
Standard deduction 24,800
Itemized deduction:- 9495
Medical expense 4000
Health premium 2600 3705
Eye glasses 175 +
Real estate taxes 6300
Mortgage interest 12,800
State income taxes 5,800
Tax prep fees 125
Union Dues 480
Total Itemized deductions 32,480

Taxable income 62,470