Question
In: Accounting
9-21 Variable and absorption costing, explaining operating-income differences. Nascar Motors assembles and sells motor vehicles and...
9-21 Variable and absorption costing, explaining operating-income differences. Nascar 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 0 150
Production 500 400
sales 350 520
Variable Costs
Manufacturing cost per unit produced $10,000 $10,000
Operating cost per unit sold 3000 3000
Fixed Costs
Manufacturing Costs $2,000,000 $2,000,000
Operating Costs 600,000 600,000
9.5-31 Full Alternative Text
The selling price per vehicle is $24,000. The budgeted level of production used to calculate the budgeted fixed manufacturing cost per unit is 500 units. There are no price, efficiency, or spending variances. Any production-volume variance is written off to cost of goods sold in the month in which it occurs.
Prepare April and May 2017 income statements for Nascar Motors
under (a) variable costing and (b) absorption costing.
Prepare a numerical reconciliation and explanation of the
difference between operating income for each month under variable
costing and absorption costing.
Solutions
ekkarill92 answered 8 months agoRelated Solutions
operating-income differences. Nascar Motors assembles and sells motor vehicles and uses standard costing. Actual data relating...
operating-income differences. Nascar Motors assembles and
sells motor vehicles and uses standard costing. Actual data
relating to April and May 2017 are as follows:
The selling price per vehicle is $24,000. The budgeted level
of production used to calculate the budgeted fixed manufacturing
cost per unit is 500 units. There are no price, efficiency, or
spending variances. Any production-volume variance is written off
to cost of goods sold in the month in which it occurs.
Required:
Prepare April and May...
Nascar Motors assembles and sells motor vehicles and uses standard costing. Actual data relating to April...
Nascar 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
50
Production
600
525
Sales
550
545
Variable costs:
Manufacturing cost per unit produced
$9,000
$9,000
Operating (marketing) cost per unit sold
4,000
4,000
Fixed costs:
Manufacturing costs
$2,250,000
$2,250,000
Operating (marketing) costs
725,000
725,000
The selling price per vehicle is $29,000. The budgeted level of
production used to calculate the...
Champion Motors assembles and sells motor vehicles and uses standard costing. Actual data and variable costing...
Champion Motors assembles and sells motor vehicles and uses
standard costing. Actual data and variable costing and absorption
costing income statements relating to April and May 2017are as
follows:
April
May
Unit data:
Beginning inventory
0
150
Production
700
675
Sales
550
800
Variable costs:
Manufacturing cost per unit produced
$8,000
$8,000
Operating (marketing) cost per unit sold
3,200
3,200
Fixed costs:
Manufacturing costs
$2,100,000
$2,100,000
Operating (marketing) costs
700,000
700,000
The selling price per vehicle is $21,000. The budgeted...
Income Statements under Absorption Costing and Variable Costing Gallatin County Motors Inc. assembles and sells snowmobile...
Income Statements under Absorption Costing and Variable
Costing
Gallatin County Motors Inc. assembles and sells snowmobile
engines. The company began operations on July 1 and operated at
100% of capacity during the first month. The following data
summarize the results for July:
Sales (11,500 units)
$1,610,000
Production costs (15,000 units):
Direct materials
$777,000
Direct labor
373,500
Variable factory overhead
186,000
Fixed factory overhead
124,500
1,461,000
Selling and administrative expenses:
Variable selling and administrative expenses
$226,500
Fixed selling and administrative expenses...
Income Statements under Absorption Costing and Variable Costing Gallatin County Motors Inc. assembles and sells snowmobile...
Income Statements under Absorption Costing and Variable
Costing
Gallatin County Motors Inc. assembles and sells snowmobile
engines. The company began operations on July 1 and operated at
100% of capacity during the first month. The following data
summarize the results for July:
Sales (16,500 units)
$2,475,000
Production costs (21,000 units):
Direct materials
$1,165,500
Direct labor
558,600
Variable factory overhead
279,300
Fixed factory overhead
186,900
2,190,300
Selling and administrative expenses:
Variable selling and administrative expenses
$339,500
Fixed selling and administrative expenses...
Income Statements under Absorption Costing and Variable Costing Gallatin County Motors Inc. assembles and sells snowmobile...
Income Statements under Absorption Costing and Variable Costing
Gallatin County Motors Inc. assembles and sells snowmobile engines.
The company began operations on July 1 and operated at 100% of
capacity during the first month. The following data summarize the
results for July: Sales (13,000 units) $2,080,000 Production costs
(17,000 units): Direct materials $1,006,400 Direct labor 482,800
Variable factory overhead 241,400 Fixed factory overhead 161,500
1,892,100 Selling and administrative expenses: Variable selling and
administrative expenses $293,300 Fixed selling and administrative
expenses...
Income Statements under Absorption Costing and Variable Costing Gallatin County Motors Inc. assembles and sells snowmobile...
Income Statements under Absorption Costing and Variable
Costing
Gallatin County Motors Inc. assembles and sells snowmobile
engines. The company began operations on July 1 and operated at
100% of capacity during the first month. The following data
summarize the results for July:
Sales (13,500 units)
$1,215,000
Production costs (17,000 units):
Direct materials
$566,100
Direct labor
272,000
Variable factory overhead
136,000
Fixed factory overhead
90,100
1,064,200
Selling and administrative expenses:
Variable selling and administrative expenses
$165,000
Fixed selling and administrative expenses...
Income Statements under Absorption Costing and Variable Costing Gallatin County Motors Inc. assembles and sells snowmobile...
Income Statements under Absorption Costing and Variable
Costing
Gallatin County Motors Inc. assembles and sells snowmobile
engines. The company began operations on July 1 and operated at
100% of capacity during the first month. The following data
summarize the results for July:
Sales (11,500 units)
$1,150,000
Production costs (15,000 units):
Direct materials
$555,000
Direct labor
267,000
Variable factory overhead
133,500
Fixed factory overhead
88,500
1,044,000
Selling and administrative expenses:
Variable selling and administrative expenses
$161,800
Fixed selling and administrative expenses...
Income Statements under Absorption and Variable Costing Shawnee Motors Inc. assembles and sells MP3 players. The...
Income Statements under Absorption and Variable Costing
Shawnee Motors Inc. assembles and sells MP3 players. The company
began operations on August 1 and operated at 100% of capacity
during the first month. The following data summarize the results
for August:
Sales (16,500 units)
$2,640,000
Production costs (21,000 units):
Direct materials
$1,243,200
Direct labor
596,400
Variable factory overhead
298,200
Fixed factory overhead
199,500
2,337,300
Selling and administrative expenses:
Variable selling and administrative expenses
$362,300
Fixed selling and administrative expenses
140,200
502,500...
Income Statements under Absorption and Variable Costing Shawnee Motors Inc. assembles and sells MP3 players. The...
Income Statements under Absorption and Variable Costing
Shawnee Motors Inc. assembles and sells MP3 players. The company
began operations on August 1 and operated at 100% of capacity
during the first month. The following data summarize the results
for August:
Sales (8,500 units)
$1,190,000
Production costs (11,000 units):
Direct materials
$569,800
Direct labor
273,900
Variable factory overhead
136,400
Fixed factory overhead
91,300
1,071,400
Selling and administrative expenses:
Variable selling and administrative expenses
$166,100
Fixed selling and administrative expenses
64,300
230,400...
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