Vernon Inc. manufactures and sells one product. Sales and production information is contained below. • Selling...

Vernon Inc. manufactures and sells one product. Sales and production information is contained below.
• Selling price per unit $50
• Variable manufacturing costs per unit produced (DM, DL, and variable MOH) $24
• Variable operating expenses per unit sold $5
• Fixed manufacturing overhead (MOH) in total for the year $135,000
• Fixed operating expenses in total for the year $55,000
• Units produced during the year 15,000
• Units sold during the year 13,000

(a) Prepare the income statement using variable costing. (10 points)
(b) Prepare the income statement using absorption costing. (10 points)
(c) Please explain the difference in operating income between the two methods. (5 points)

whoever answer this can you write it out not in script it so im able to understand the work thank you in advance

Solutions

Expert Solution

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

Inc. manufactures and sells one product. The following information pertains to each of the company's first...

Inc. manufactures and sells one product. The following information pertains to each of the company's first two years of operations: Selling price per unit $200 Variable costs per unit: Manufacturing: Direct materials $68 Direct labor $40 Variable manufacturing overhead $11 Variable selling and administrative expense $5 Fixed costs per year: Fixed manufacturing overhead $49,000 Selling and administrative expense $111,000 Year 1 2 Production (units) 5,000 4,700 Sales (units) 4,600 5,100 Q.) What is net operating income under absorption costing...

Laura, Inc. manufactures and sells one product. The following information pertains to each of the company's...

Laura, Inc. manufactures and sells one product. The following information pertains to each of the company's first two years of operations: Selling price per unit $200 Variable costs per unit: Manufacturing: Direct materials $86 Direct labor $40 Variable manufacturing overhead $11 Variable selling and administrative expense $5 Fixed costs per year: Fixed manufacturing overhead $49,000 Selling and administrative expense $87,000 Year 1 2 Production (units) 5,000 4,600 Sales (units) 4,500 5,100 (Q): What is net operating income under absorption...

[The following information applies to the questions displayed below.] O’Brien Company manufactures and sells one product....

[The following information applies to the questions displayed below.] O’Brien Company manufactures and sells one product. The following information pertains to each of the company’s first three years of operations: Variable costs per unit: Manufacturing: Direct materials $ 27 Direct labor $ 15 Variable manufacturing overhead $ 5 Variable selling and administrative $ 3 Fixed costs per year: Fixed manufacturing overhead $ 540,000 Fixed selling and administrative expenses $ 110,000 During its first year of operations, O’Brien produced 93,000 units...

[The following information applies to the questions displayed below.] O’Brien Company manufactures and sells one product....

[The following information applies to the questions displayed below.] O’Brien Company manufactures and sells one product. The following information pertains to each of the company’s first three years of operations: Variable costs per unit: Manufacturing: Direct materials $28 Direct labor $15 Variable manufacturing overhead $4 Variable selling and administrative $3 Fixed costs per year: Fixed manufacturing overhead $580,000 Fixed selling and administrative expenses $180,000 During its first year of operations, O’Brien produced 93,000 units and sold 76,000 units. During its...

[The following information applies to the questions displayed below.] O’Brien Company manufactures and sells one product....

[The following information applies to the questions displayed below.] O’Brien Company manufactures and sells one product. The following information pertains to each of the company’s first three years of operations: Variable costs per unit: Manufacturing: Direct materials $ 29 Direct labor $ 16 Variable manufacturing overhead $ 3 Variable selling and administrative $ 2 Fixed costs per year: Fixed manufacturing overhead $ 580,000 Fixed selling and administrative expenses $ 150,000 During its first year of operations, O’Brien produced 95,000 units...

[The following information applies to the questions displayed below.] O’Brien Company manufactures and sells one product....

[The following information applies to the questions displayed below.] O’Brien Company manufactures and sells one product. The following information pertains to each of the company’s first three years of operations: Variable costs per unit: Manufacturing: Direct materials $ 29 Direct labor $ 18 Variable manufacturing overhead $ 4 Variable selling and administrative $ 3 Fixed costs per year: Fixed manufacturing overhead $ 560,000 Fixed selling and administrative expenses $ 180,000 During its first year of operations, O’Brien produced 96,000 units...

Williams Ltd manufactures and sells a single product. The selling price is R18. The following information...

Williams Ltd manufactures and sells a single product. The selling price is R18. The following information relates to its yearly production and cost data. (Assume that there is no change to the stock level of the company.) Unit Total Year Volume Cost R 1 300 000 4 000 000 2 150 000 2 800 000 3 420 000 6 600 000 4 280 000 3 900 000 5 230 000 3 200 000 6 120 000 2 100 000 Required:...

TG manufactures Product Z. Its standard selling price is $55. The production and sales budget for...

TG manufactures Product Z. Its standard selling price is $55. The production and sales budget for the quarter ended 31 March 20X3 was 7,500 units. The standard specification per unit of Product Z comprises: Direct labour 4 standard hours at $6/hour Direct material 1.2 kg at $10/kg Standard variable overhead 4 standard hours at $1/hour Budgeted fixed overhead $75,000 At the end of the quarter the management accounts showed the following: Production and sales of product Z in units: 7700...

Olmo, Inc., manufactures and sells two products: Product K0 and Product H9. The annual production and...

Olmo, Inc., manufactures and sells two products: Product K0 and Product H9. The annual production and sales of Product of K0 is 900 units and of Product H9 is 900 units. The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Activity Cost Pools Activity Measures Estimated Overhead Cost Expected Activity Product K0 Product H9 Total Labor-related DLHs $ 549,608 9,000 4,500 13,500 Production orders orders 52,619 1,000 600 1,600 Order size...

Olmo, Inc., manufactures and sells two products: Product K0 and Product H9. The annual production and...

Olmo, Inc., manufactures and sells two products: Product K0 and Product H9. The annual production and sales of Product of K0 is 1,000 units and of Product H9 is 1,000 units. The company has an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Activity Cost Pools Activity Measures Estimated Overhead Cost Expected Activity Product K0 Product H9 Total Labor-related DLHs $ 549,808 2,000 1,000 3,000 Production orders orders 52,819 1,100 600 1,700 Order size...

Subjects