Question

Exercise 20-17

Siren Company builds custom fishing lures for sporting goods stores. In its first year of operations, 2017, the company incurred the following costs.

Variable Costs per Unit
Direct materials $7.80
Direct labor $3.59
Variable manufacturing overhead $6.03
Variable selling and administrative expenses $4.06

Fixed Costs per Year
Fixed manufacturing overhead $231,400
Fixed selling and administrative expenses $218,504

Siren Company sells the fishing lures for $26.00. During 2017, the company sold 79,000 lures and produced 89,000 lures.

Assuming the company uses variable costing, calculate Siren’s manufacturing cost per unit for 2017. (Round answer to 2 decimal places, e.g.10.50.)

Manufacturing cost per unit
$

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Prepare a variable costing income statement for 2017. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

SIREN COMPANY
Income Statement

December 31, 2017
For the Quarter Ended December 31, 2017
For the Year Ended December 31, 2017
Variable Costing

Administrative Expenses
Contribution Margin
Fixed Manufacturing Overhead
Fixed Selling and Administrative Expenses
Gross Profit
Net Income/(Loss)
Sales
Total Fixed Expenses
Total Variable Expenses
Variable Cost of Goods Sold
Variable Selling and Administrative Expenses
$

Administrative Expenses
Contribution Margin
Fixed Manufacturing Overhead
Fixed Selling and Administrative Expenses
Gross Profit
Net Income/(Loss)
Sales
Total Fixed Expenses
Total Variable Expenses
Variable Cost of Goods Sold
Variable Selling and Administrative Expenses
$

Administrative Expenses
Contribution Margin
Fixed Manufacturing Overhead
Fixed Selling and Administrative Expenses
Gross Profit
Net Income/(Loss)
Sales
Total Fixed Expenses
Total Variable Expenses
Variable Cost of Goods Sold
Variable Selling and Administrative Expenses

Administrative Expenses
Contribution Margin
Fixed Manufacturing Overhead
Fixed Selling and Administrative Expenses
Gross Profit
Net Income/(Loss)
Sales
Total Fixed Expenses
Total Variable Expenses
Variable Cost of Goods Sold
Variable Selling and Administrative Expenses

Administrative Expenses
Contribution Margin
Fixed Manufacturing Overhead
Fixed Selling and Administrative Expenses
Gross Profit
Net Income/(Loss)
Sales
Total Fixed Expenses
Total Variable Expenses
Variable Cost of Goods Sold
Variable Selling and Administrative Expenses

Administrative Expenses
Contribution Margin
Fixed Manufacturing Overhead
Fixed Selling and Administrative Expenses
Gross Profit
Net Income/(Loss)
Sales
Total Fixed Expenses
Total Variable Expenses
Variable Cost of Goods Sold
Variable Selling and Administrative Expenses

Administrative Expenses
Contribution Margin
Fixed Manufacturing Overhead
Fixed Selling and Administrative Expenses
Gross Profit
Net Income/(Loss)
Sales
Total Fixed Expenses
Total Variable Expenses
Variable Cost of Goods Sold
Variable Selling and Administrative Expenses
$

LINK TO TEXT

Assuming the company uses absorption costing, calculate Siren’s manufacturing cost per unit for 2017. (Round answer to 2 decimal places, e.g.10.50.)

Manufacturing cost per unit
$

LINK TO TEXT

Prepare an absorption costing income statement for 2017. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

SIREN COMPANY
Income Statement

December 31, 2017
For the Quarter Ended December 31, 2017
For the Year Ended December 31, 2017
Absorption Costing

Administrative Expenses
Contribution Margin
Cost of Goods Sold
Fixed Manufacturing Overhead
Fixed Selling and Administrative Expenses
Gross Profit
Net Income/(Loss)
Sales
Total Fixed Expenses
Total Variable Expenses
Variable Cost of Goods Sold
Variable Selling and Administrative Expenses
$

Administrative Expenses
Contribution Margin
Cost of Goods Sold
Fixed Manufacturing Overhead
Fixed Selling and Administrative Expenses
Gross Profit
Net Income/(Loss)
Sales
Total Fixed Expenses
Total Variable Expenses
Variable Cost of Goods Sold
Variable Selling and Administrative Expenses

Administrative Expenses
Contribution Margin
Cost of Goods Sold
Fixed Manufacturing Overhead
Fixed Selling and Administrative Expenses
Gross Profit
Net Income/(Loss)
Sales
Total Fixed Expenses
Total Variable Expenses
Variable Cost of Goods Sold
Variable Selling and Administrative Expenses

Administrative Expenses
Contribution Margin
Cost of Goods Sold
Fixed Manufacturing Overhead
Fixed Selling and Administrative Expenses
Gross Profit
Net Income/(Loss)
Sales
Total Fixed Expenses
Total Variable Expenses
Variable Cost of Goods Sold
Variable Selling and Administrative Expenses
$

Administrative Expenses
Contribution Margin
Cost of Goods Sold
Fixed Manufacturing Overhead
Fixed Selling and Administrative Expenses
Gross Profit
Net Income/(Loss)
Sales
Total Fixed Expenses
Total Variable Expenses
Variable Cost of Goods Sold
Variable Selling and Administrative Expenses

Administrative Expenses
Contribution Margin
Cost of Goods Sold
Fixed Manufacturing Overhead
Fixed Selling and Administrative Expenses
Gross Profit
Net Income/(Loss)
Sales
Total Fixed Expenses
Total Variable Expenses
Variable Cost of Goods Sold
Variable Selling and Administrative Expenses
$

LINK TO TEXT

Question Attempts: Unlimited
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SUBMIT ANSWER

Answer 1

Assuming the company uses variable costing, calculate Siren’s manufacturing cost per unit for 2017
Variable Costs per Unit
Direct materials		$7.80
Direct labor		$3.59
Variable manufacturing overhead		$6.03
Variable manfacturing cost per unit		$17.42
Prepare a variable costing income statement for 2017
SIREN COMPANY
Income statement
For the year end december 31,2017
Particulars		Amount($)
Sales ( 79000*26)		2054000
Less :
Variable cost of goods sold (79000*17.42)	1376180
Variable selling and administraitve expenses (79000*4.06)	320740
		1696920
Contribution margin		357080
Less :
Fixed manfacturing overhead	239200
Fixed selling and administrative expenses	218504
		457704
Net income / (loss)		-100624
Assuming the company uses absorption costing, calculate Siren’s manufacturing cost per unit for 2017
Direct materials		$7.80
Direct labor		$3.59
Variable manufacturing overhead		$6.03
Fixed manfacturing overhead (239200/92000)		$2.60
Manfacturing cost per unit		$20.02
Prepare an absorption costing income statement for 2017
SIREN COMPANY
Income statement
For the year end december 31,2017
Particulars		Amount($)
Sales ( 79000*26)		2054000
Less :
Cost of goods sold (79000*20.02)		1581580
Gross profit / margin		472420
Less : selling and administrative expenses
Variable selling and administrative expense	320740
Fixed selling and administrative expenses	218504	539244
Net income / (loss)		-66824