Question
In: Accounting
Beginning inventory 0 Units produced 27,000 Units sold 18,500 Selling price per unit $ 93 ...
| Beginning inventory | 0 | ||
| Units produced | 27,000 | ||
| Units sold | 18,500 | ||
| Selling price per unit | $ | 93 | |
| Selling and administrative expenses: | |||
| Variable per unit | $ | 3 | |
| Fixed (total) | $ | 518,000 | |
| Manufacturing costs: | |||
| Direct materials cost per unit | $ | 24 | |
| Direct labour cost per unit | $ | 14 | |
| Variable manufacturing overhead cost per unit | $ | 9 | |
| Fixed manufacturing overhead cost (total) | $ | 756,000 | |
Since the new case is unique in design, management is anxious to see how profitable it will be and has asked that an income statement be prepared for the month.
Required:
1. Assume that the company uses absorption costing.
a. Determine the unit product cost.
b. Prepare an income statement for the month. (Do not leave any empty spaces; input a 0 wherever it is required.)
2. Assume that the company uses variable costing.
a. Determine the unit product cost.
b. Prepare a contribution format income statement for the month. (Do not leave any empty spaces; input a 0 wherever it is required.)
Zurgot Inc. has just organized a new division to manufacture and sell specially designed computer tables, using select hardwoods. The division’s monthly costs are shown in the schedule below:
| Manufacturing costs: | |||
| Variable costs per unit: | |||
| Direct materials | $ | 188 | |
| Variable manufacturing overhead | $ | 19 | |
| Fixed manufacturing overhead costs (total) | $ | 491,960 | |
| Selling and administrative costs: | |||
| Variable | 5 | % of sales | |
| Fixed (total) | $ | 296,180 | |
Zurgot regards all of its workers as full-time employees, and the company has a long-standing no-layoff policy. Furthermore, production is highly automated. Accordingly, the company includes its labour costs in its fixed manufacturing overhead. The tables sell for $424 each.
During the first month of operations, the following activity was recorded:
| Units produced | 5,020 | ||
| Units sold | 4,040 | ||
Required:
1. Compute the unit product cost under each of the following costing method.
2. Prepare an income statement for the month using absorption costing. (Do not leave any empty spaces; input a 0 wherever it is required.)
3. Prepare a contribution format income statement for the month using variable costing. (Do not leave any empty spaces; input a 0 wherever it is required.)
4. Not available in Connect.
5. Reconcile the absorption costing and variable costing operating income figures in (2) and (3) above.
Solutions
ekkarill92 answered 1 year agoRelated Solutions
selling price $95 units in beginning inventory 100 units produced 6,200 units sold 5,900 units in...
selling price
$95
units in beginning inventory
100
units produced
6,200
units sold
5,900
units in ending inventory
400
variable cost per unit
direct materials
$42
direct labor
$28
variable manufacturing overhead
$1
variable selling and administrative
$5
fixed costs
fixed manufacturing overhead
$62,000
fixed selling and administrative
$35,400
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Easy Breeze company produced 100,000 units, sold 90,000
units at a selling price per unit of $450, and incurred the
following manufacturing costs:
Direct Materials = $40 per unit
Direct Labor = $18 per unit
Factory overhead costs:
Variable Factory Overhead = $23 per unit
Fixed Factory overhead = $250,000
Semi-variable Factory overhead cost is $70,000. The
company utilized 14,000 machine hours during this period. The
following additional information is provided semi-variable factory
overhead into variable and fixed factory overhead...
Easy Breeze company produced 100,000 units, sold 90,000 units at a selling price per unit of...
Easy Breeze company produced 100,000 units, sold 90,000
units at a selling price per unit of $450, and incurred the
following manufacturing costs:
Direct Materials = $40 per unit
Direct Labor = $18 per unit
Factory overhead costs:
Variable Factory Overhead = $23 per unit
Fixed Factory overhead = $250,000
Semi-variable Factory overhead cost is $70,000. The
company utilized 14,000 machine hours during this period. The
following additional information is provided semi-variable factory
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You are given the following information: Units in beginning inventory 0 Units produced 40,000 Units sold...
You are given the following
information:
Units in beginning inventory
0
Units produced
40,000
Units sold
37,000
Selling price per unit
$120.00
Variable costs per unit:
Direct materials
$15.00
Direct labor
$30.00
Variable manufacturing
overhead
$5.00
Variable selling and
administrative
$3.00
Fixed expenses per year:
Fixed manufacturing
overhead
$600,000
Fixed selling and
administrative
$800,000
Based on this information, calculate the company's
operating income under both absorption costing and variable costing
approaches. If there is a difference between the two income...
You are given the following information: Units in beginning inventory 0 Units produced 40,000 Units sold...
You are given the following
information:
Units in beginning inventory
0
Units produced
40,000
Units sold
37,000
Selling price per unit
$120.00
Variable costs per unit:
Direct materials
$15.00
Direct labor
$30.00
Variable manufacturing
overhead
$5.00
Variable selling and
administrative
$3.00
Fixed expenses per year:
Fixed manufacturing
overhead
$600,000
Fixed selling and
administrative
$800,000
Based on this information, calculate the company's
operating income under both absorption costing and variable costing
approaches. If there is a difference between the two income...
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dollars as the allocation base. Additional information relating to
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Manufacturing Inc. Income Statement Sales ………………………………………………………..
$2,100,000 Cost of goods sold ………………………………….. 1,600,000 Gross
Margin ..……………............................... 500,000...
Units: Beginning inventory: 0 Produced: 70,000 COGS (in units) Sold: 50,000 Fixed costs maunfacturing overhead: $200,000...
Units:
Beginning inventory: 0
Produced: 70,000
COGS (in units)
Sold: 50,000
Fixed costs maunfacturing overhead: $200,000
Fixed cost selling expenses: $40,000
Total fixed costs: $350,000
Variable selling costs per unit are $5.00 per unit.
Manufacturing costs (per unit) Absorption Variable
Direct Materials $50 $50
Direct labor $25 $25
Variable manufacturing overhead. $5 $5
Fixed costs Manufacturing overhead. ? ?
(per units produced)
TOTAL $ ? ?
Find the blanks.
What is the difference between the amount reflected for ending
inventory...
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and administrative costs. Its per unit variable costs follow.
Material $ 3.20 Direct labor (paid on the basis of completed units)
2.20 Variable overhead costs 0.32 Variable selling and
administrative costs 0.12 Next year the company will use new
material, which will reduce material costs by 60% and direct...
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