Question
In: Accounting
During its first month of operations, Hanson Baking Company produced 7,000 cakes of which 6,400 were...
During its first month of operations, Hanson Baking Company produced 7,000 cakes of which 6,400 were sold. The following information was taken from the accounting records for the month of July, 2011:
July 20xx
|
Sales |
$128,000 |
|
|
Manufacturing Costs |
||
|
Direct Materials |
$53,900 |
|
|
Direct Labor |
25,900 |
|
|
Variable Manufacturing Overhead |
14,000 |
|
|
Fixed Manufacturing Overhead |
18,200 |
|
|
Selling and Administrative Expenses |
||
|
Variable |
$14,080 |
|
|
Fixed |
6,400 |
During August, Hanson Baking Company produced 5,800 cakes of which 6,400 were sold. The following information was taken from the accounting records for the month August, 2011:
August 20xx
|
Sales |
$128,000 |
|
|
Manufacturing Costs |
||
|
Direct Materials |
$44,660 |
|
|
Direct Labor |
21,460 |
|
|
Variable Manufacturing Overhead |
11,600 |
|
|
Fixed Manufacturing Overhead |
18,200 |
|
|
Selling and Administrative Expenses |
||
|
Variable |
$14,080 |
|
|
Fixed |
6,400 |
Required: - Complete the following using Excel
Prepare an income statement using both Absorption and Variable Costing for the months of May and June.
Compare the net income for May and June under Absorption Costing. Are the amounts different or the same? Explain
Compare the net income for May and June under Variable Costing. Are the amounts different or the same? Explain
Solutions
Expert Solution
| Q1 | ||
| Income statement-variable costing | ||
| May | June | |
| Sales | $ 128,000 | $ 128,000 |
| Less: Variable Manufacturing Costs | ||
| Direct Materials | $ 53,900 | $ 44,660 |
| Direct Labor | $ 25,900 | $ 21,460 |
| Variable Manufacturing Overhead | $ 14,000 | $ 11,600 |
| Selling and Administrative Expenses-Variable | $ 14,080 | $ 14,080 |
| Contribution | $ 20,120 | $ 36,200 |
| Less: Fixed cost | ||
| Fixed Manufacturing Overhead | $ 18,200 | $ 18,200 |
| Selling and Administrative Expenses-Fixed | $ 6,400 | $ 6,400 |
| Net income | $ (4,480) | $ 11,600 |
| Income statement-Absorption costing | ||
| May | June | |
| Sales | $ 128,000 | $ 128,000 |
| Less: Manufacturing Costs | ||
| Direct Materials | $ 53,900 | $ 44,660 |
| Direct Labor | $ 25,900 | $ 21,460 |
| Variable Manufacturing Overhead | $ 14,000 | $ 11,600 |
| Fixed Manufacturing Overhead | $ 16,640 | $ 19,760 |
| Cost of goods sold | $ 17,560 | $ 30,520 |
| Less: Selling and administrative | ||
| Fixed | $ 6,400 | $ 6,400 |
| Variable | $ 14,080 | $ 14,080 |
| Net income | $ (2,920) | $ 10,040 |
| Q2 | ||
| Yes, It is different due to change in manufacturing cost and no. of cakes produced. | ||
| Q3 | ||
| Yes, it is different due to change in manufacturing cost and no. of cakes produced. | ||
ekkarill92 answered 2 years agoRelated Solutions
Dozier Company produced and sold 1,000 units during its first month of operations. It reported the...
Dozier Company produced and sold 1,000 units during its first
month of operations. It reported the following costs and expenses
for the month:
Direct materials
$
73,000
Direct labor
$
37,000
Variable manufacturing overhead
$
16,600
Fixed manufacturing overhead
29,200
Total manufacturing overhead
$
45,800
Variable selling expense
$
12,800
Fixed selling expense
19,600
Total selling expense
$
32,400
Variable administrative expense
$
4,400
Fixed administrative expense
25,800
Total administrative expense
$
30,200
Required:
1. With respect to cost classifications...
Dozier Company produced and sold 1,000 units during its first month of operations. It reported the...
Dozier Company produced and sold 1,000 units during its first
month of operations. It reported the following costs and expenses
for the month:Dozier Company produced and sold 1,000 units during
its first month of operations. It reported the following costs and
expenses for the month:
Direct Material
$77,000
Direct Labor
$39,000
Variable Manufacturing Overhead
$18,200
Fixed Manufacturing Overhead
$30,400
Total Manufacturing Overhead
$48,600
Variable Selling expense
$13,600
Fixed Selling expense
$21,200
Total Selling expense
$34,800
Variable Administrative expense
$4,800
Fixed...
Dozier Company produced and sold 1,000 units during its first month of operations. It reported the...
Dozier Company produced and sold 1,000 units during its first
month of operations. It reported the following costs and expenses
for the month:
Direct materials
$
84,000
Direct labor
$
42,500
Variable manufacturing overhead
$
21,000
Fixed manufacturing overhead
32,500
Total manufacturing overhead
$
53,500
Variable selling expense
$
15,000
Fixed selling expense
24,000
Total selling expense
$
39,000
Variable administrative expense
$
5,500
Fixed administrative expense
28,000
Total administrative expense
$
33,500
Required:
1. With respect to cost classifications...
Dozier Company produced and sold 1,000 units during its first month of operations. It reported the...
Dozier Company produced and sold 1,000 units during its first
month of operations. It reported the following costs and expenses
for the month:
Direct materials
$
82,000
Direct labor
$
41,500
Variable manufacturing overhead
$
20,200
Fixed manufacturing overhead
31,900
Total manufacturing overhead
$
52,100
Variable selling expense
$
14,600
Fixed selling expense
23,200
Total selling expense
$
37,800
Variable administrative expense
$
5,300
Fixed administrative expense
27,600
Total administrative expense
$
32,900
Required:
1. With respect to cost classifications...
Dozier Company produced and sold 1,000 units during its first month of operations. It reported the...
Dozier Company produced and sold 1,000 units during its first
month of operations. It reported the following costs and expenses
for the month:
Direct materials $ 85,000
Direct labor $ 43,000
Variable manufacturing overhead $ 21,400
Fixed manufacturing overhead 32,800
Total manufacturing overhead $ 54,200
Variable selling expense $ 15,200
Fixed selling expense 24,400
Total selling expense $ 39,600
Variable administrative expense $ 5,600
Fixed administrative expense 28,200
Total administrative expense $ 33,800
Required:
1. With respect to cost classifications...
Dozier Company produced and sold 1,000 units during its first month of operations. It reported the...
Dozier Company produced and sold 1,000 units during its first
month of operations. It reported the following costs and expenses
for the month:
Direct materials
$
77,000
Direct labor
$
39,000
Variable manufacturing overhead
$
18,200
Fixed manufacturing overhead
30,400
Total manufacturing overhead
$
48,600
Variable selling expense
$
13,600
Fixed selling expense
21,200
Total selling expense
$
34,800
Variable administrative expense
$
4,800
Fixed administrative expense
26,600
Total administrative expense
$
31,400
Required:
1. With respect to cost classifications...
Dozier Company produced and sold 1,000 units during its first month of operations. It reported the...
Dozier Company produced and sold 1,000 units during its first
month of operations. It reported the following costs and expenses
for the month:
Direct materials
$
80,000
Direct labor
$
40,500
Variable manufacturing overhead
$
19,400
Fixed manufacturing overhead
31,300
Total manufacturing overhead
$
50,700
Variable selling expense
$
14,200
Fixed selling expense
22,400
Total selling expense
$
36,600
Variable administrative expense
$
5,100
Fixed administrative expense
27,200
Total administrative expense
$
32,300
Required:
1. With respect to cost classifications...
Dozier Company produced and sold 1,000 units during its first month of operations. It reported the...
Dozier Company produced and sold 1,000 units during its first
month of operations. It reported the following costs and expenses
for the month:
Direct materials
$
72,000
Direct labor
$
36,500
Variable manufacturing overhead
$
16,200
Fixed manufacturing overhead
28,900
Total manufacturing overhead
$
45,100
Variable selling expense
$
12,600
Fixed selling expense
19,200
Total selling expense
$
31,800
Variable administrative expense
$
4,300
Fixed administrative expense
25,600
Total administrative expense
$
29,900
Required:
1. With respect to cost classifications...
Dozier Company produced and sold 1,000 units during its first month of operations. It reported the...
Dozier Company
produced and sold 1,000 units during its first month of operations.
It reported the following costs and expenses for the month:
Direct materials
$
74,000
Direct labor
$
37,500
Variable manufacturing overhead
$
17,000
Fixed manufacturing overhead
29,500
Total manufacturing overhead
$
46,500
Variable selling expense
$
13,000
Fixed selling expense
20,000
Total selling expense
$
33,000
Variable administrative expense
$
4,500
Fixed administrative expense
26,000
Total administrative expense
$
30,500
3. With respect to
cost classifications for...
Dozier Company produced and sold 1,000 units during its first month of operations. It reported the...
Dozier Company
produced and sold 1,000 units during its first month of operations.
It reported the following costs and expenses for the month:
Direct materials
$
74,000
Direct labor
$
37,500
Variable manufacturing overhead
$
17,000
Fixed manufacturing overhead
29,500
Total manufacturing overhead
$
46,500
Variable selling expense
$
13,000
Fixed selling expense
20,000
Total selling expense
$
33,000
Variable administrative expense
$
4,500
Fixed administrative expense
26,000
Total administrative expense
$
30,500
4. With respect to
cost classifications for...
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