Question
In: Accounting
Exercise 19-7 Income reporting under absorption costing and variable costing LO P2 [The following information applies...
Exercise 19-7 Income reporting under absorption costing and variable costing LO P2
[The following
information applies to the questions displayed below.]
Oak Mart, a producer of solid oak tables, reports the following
data from its second year of business.
| Sales price per unit | $ | 330 | per unit |
| Units produced this year | 110,000 | units | |
| Units sold this year | 113,500 | units | |
| Units in beginning-year inventory | 3,500 | units | |
| Beginning inventory costs | |||
| Variable (3,500 units × $130) | $ | 455,000 | |
| Fixed (3,500 units × $75) | 262,500 | ||
| Total | $ | 717,500 | |
| Manufacturing costs this year | |||
| Direct materials | $ | 46 | per unit |
| Direct labor | $ | 70 | per unit |
| Overhead costs this year | |||
| Variable overhead | $ | 3,200,000 | |
| Fixed overhead | $ | 7,400,000 | |
| Selling and administrative costs this year | |||
| Variable | $ | 1,400,000 | |
| Fixed | 4,400,000 |
1. Prepare the current-year income statement for the company using variable costing.
Solutions
Expert Solution
Prepare the current year income statement using variable costing as follows:
Above figures have been calculated in the following manner:
ekkarill92 answered 6 months agoRelated Solutions
Required information Exercise 19-7 Income reporting under absorption costing and variable costing LO P2 [The following...
Required information
Exercise 19-7 Income reporting under absorption costing and
variable costing LO P2
[The following information applies to the questions
displayed below.]
Oak Mart, a producer of solid oak tables, reports the following
data from its second year of business.
Sales price per unit
$
300
per unit
Units produced this year
120,000
units
Units sold this year
123,750
units
Units in beginning-year inventory
3,750
units
Beginning inventory costs
Variable (3,750 units × $135)
$
506,250
Fixed (3,750 units...
Required information Exercise 19-7 Income reporting under absorption costing and variable costing LO P2 [The following...
Required information
Exercise 19-7 Income reporting under absorption costing and
variable costing LO P2
[The following information applies to the questions
displayed below.]
Oak Mart, a producer of solid oak tables, reports the following
data from its second year of business.
Sales price per unit
$
300
per unit
Units produced this year
120,000
units
Units sold this year
123,750
units
Units in beginning-year inventory
3,750
units
Beginning inventory costs
Variable (3,750 units × $135)
$
506,250
Fixed (3,750 units...
Exercise 19-3 Income reporting under absorption costing and variable costing LO P2 Sims Company, a manufacturer...
Exercise 19-3 Income reporting under absorption costing and
variable costing LO P2
Sims Company, a manufacturer of tablet computers, began
operations on January 1, 2017. Its cost and sales information for
this year follows.
Manufacturing costs
Direct materials
$
35
per unit
Direct labor
$
55
per unit
Overhead costs for the year
Variable overhead
$
3,000,000
Fixed overhead
$
7,000,000
Selling and administrative costs for the year
Variable
$
750,000
Fixed
$
4,250,000
Production and sales for the year...
Exercise 19-3 Income reporting under absorption costing and variable costing LO P2 Sims Company, a manufacturer...
Exercise 19-3 Income reporting under absorption costing and
variable costing LO P2
Sims Company, a manufacturer of tablet computers, began
operations on January 1, 2017. Its cost and sales information for
this year follows.
Manufacturing costs
Direct materials
$
35
per unit
Direct labor
$
55
per unit
Overhead costs for the year
Variable overhead
$
3,000,000
Fixed overhead
$
7,000,000
Selling and administrative costs for the year
Variable
$
750,000
Fixed
$
4,250,000
Production and sales for the year...
Required information Exercise 6-9 Income statement under absorption costing and variable costing LO P1, P2 [The...
Required information
Exercise 6-9 Income statement under absorption costing and
variable costing LO P1, P2
[The following information applies to the questions
displayed below.]
Cool Sky reports the following costing data on its product for
its first year of operations. During this first year, the company
produced 44,000 units and sold 36,000 units at a price of $120 per
unit.
Manufacturing
costs
Direct materials per unit
$
48
Direct labor per unit
$
18
Variable overhead per unit
$...
Exercise 19-5 Absorption costing and variable costing income statements LO P2 Rey Company’s single product sells...
Exercise 19-5 Absorption costing and variable costing income
statements LO P2
Rey Company’s single product sells at a price of $216 per unit.
Data for its single product for its first year of operations
follow.
Direct materials
$
20
per unit
Direct labor
$
28
per unit
Overhead costs
Variable overhead
$
6
per unit
Fixed overhead per year
$
160,000
per year
Selling and administrative expenses
Variable
$
18
per unit
Fixed
$
200,000
per year
Units produced and...
Exercise 19-5 Absorption costing and variable costing income statements LO P2 Rey Company’s single product sells...
Exercise 19-5 Absorption costing and variable costing income
statements LO P2
Rey Company’s single product sells at a price of $236 per unit.
Data for its single product for its first year of operations
follow.
Direct materials
$
40
per unit
Direct labor
$
48
per unit
Overhead costs
Variable overhead
$
4
per unit
Fixed overhead per year
$
141,000
per year
Selling and administrative expenses
Variable
$
38
per unit
Fixed
$
240,000
per year
Units produced and...
Problem 19-2A Variable costing income statement and conversion to absorption costing income LO P2, P3 Trez...
Problem 19-2A Variable costing income statement and conversion
to absorption costing income LO P2, P3
Trez Company began operations this year. During this first year,
the company produced 100,000 units and sold 80,000 units. The
absorption costing income statement for this year
follows.
Sales (80,000 units × $45 per unit)
$
3,600,000
Cost of goods sold
Beginning inventory
$
0
Cost of goods manufactured (100,000 units × $25 per unit)
2,500,000
Cost of good available for sale
2,500,000
Ending inventory...
Problem 19-2A Variable costing income statement and conversion to absorption costing income LO P2, P3 Trez...
Problem 19-2A Variable costing income statement and conversion
to absorption costing income LO P2, P3
Trez Company began operations this year. During this first year,
the company produced 100,000 units and sold 80,000 units. The
absorption costing income statement for this year
follows.
Sales (80,000 units × $40 per
unit)
$
3,200,000
Cost of goods sold
Beginning inventory
$
0
Cost of goods manufactured
(100,000 units × $20 per unit)
2,000,000
Cost of good available for
sale
2,000,000
Ending inventory...
Problem 7-2A Estimating and reporting bad debts LO P2, P3 [The following information applies to the...
Problem 7-2A Estimating and reporting bad debts LO P2, P3
[The following information applies to the questions
displayed below.]
At December 31, 2017, Hawke Company reports the following results
for its calendar year.
Cash sales
$
2,185,820
Credit sales
3,998,000
In addition, its unadjusted trial balance includes the following
items.
Accounts receivable
$
1,211,394
debit
Allowance for doubtful accounts
25,160
debit
. Prepare the adjusting entry for this company
to recognize bad debts under each of the following independent
assumptions....
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