In: Accounting
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Budgeted manufacturing cost per unit under absorption costing | ||
Fixed Manufacturing cost=(A) | 86500 | |
Production units=(B) | 8650 | |
Fixed Manufacturing cost per unit=(C )=(A)/(B) | 10 | |
Variable manufacturing cost per unit=(D) | 35 | |
Total Manufacturing cost per unit=(C )+(D) | 45 | |
Barian Ltd | ||
Income statement under Absorption Costing | ||
December 31st,2020 | ||
Revenue(8650*$85)=(A) | $ 7,35,250.00 | |
Cost of goods sold | ||
Variable manufacturing cost(8650*$35) | $ 3,02,750.00 | |
fixed manaufacturing cost | $ 86,500.00 | |
Cost of goods available for sales | $ 3,89,250.00 | |
Cost of goods sold=(B) | $ 3,89,250.00 | |
Gross Margin(Revenue-Cost of goods sold)=(C ) | $ 3,46,000.00 | |
Less: Operating Cost=(D ) | ||
Variable selling & Administrative cost(8650*$6) | $ 51,900.00 | |
Fixed selling & Administrative cost | $ 1,84,600.00 | |
Operating Income=(C )-(D ) | $ 1,09,500.00 | |
Barian Ltd | ||
Income Statement under Variable Costing | ||
December 31st,2020 | ||
Revenue(8650*$85)=(A) | $ 7,35,250.00 | |
Variable cost: | ||
Add: Variable manufacturing cost(8650*$35)=(ii) | $ 3,02,750.00 | |
Variable selling & Administrative cost(8650*$6) | $ 51,900.00 | |
Total Variable cost=(B) | $ 3,54,650.00 | |
Contribution Margin=(C )=(A)-(B) | $ 3,80,600.00 | |
Less: Fixed Cost=(D ) | ||
Fixed Manufacturing Overhead | $ 86,500.00 | |
Fixed selling & Administrative cost | $ 1,84,600.00 | |
Net Operating Income=(C )-(D) | $ 1,09,500.00 | |
Note: In case Units Produced=Units sold there is no difference between Absorption costing and Variable | ||
costing Net Income. |