Question
In: Accounting
Werewolf’s Manufacturing began its operations on January 1 of the current year. Werewolf produced 10,000 units...
Werewolf’s Manufacturing began its operations on January 1 of the current year. Werewolf produced 10,000 units during the year, sold 8,000 units at an average cost of $22 per unit, and had 2,000 units in ending inventory. Variable production cost were $14 per unit, variable selling expenses were $2 per unit, fixed overhead totaled $12,000, and fixed selling and administrative expenses totaled $30,000.
Werewolf’s Manufacturing began its operations on January 1 of the current year. Werewolf produced 10,000 units during the year, sold 8,000 units at an average cost of $22 per unit, and had 2,000 units in ending inventory. Variable production cost were $14 per unit, variable selling expenses were $2 per unit, fixed overhead totaled $12,000, and fixed selling and administrative expenses totaled $30,000.
Please construct an income statement
- Under absorption costing, what was Werewolf’s operating income?
- Under absorption costing, what was Werewolf’s ending inventory on the balance sheet?
- Under variable costing, what was Werewolf’s operating income?
- Under variable costing, what was Werewolf’s ending inventory on the balance sheet?
- Explain the cause of the difference between the absorption and variable costing net incomes and the ending inventory balances under absorption and variable costing.
Solutions
ekkarill92 answered 1 year agoRelated Solutions
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Genuine Spice Inc. began operations on January 1 of the current year. The company produces eight-...
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year. The company produces eight- ounce bottles of hand and body
lotion called Eternal Beauty. The lotion is sold wholesale in
12-bottle cases for $100 per case. There is a selling commission of
$20 per case. The January direct materials, direct labor, and
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only part C
Genuine Spice Inc. began operations on January 1 of the current
year. The company produces 8-ounce bottles of hand and body lotion
called Eternal Beauty. The lotion is sold wholesale in 12-bottle
cases for $100 per case. There is a selling commission of $20 per
case. The January direct materials, direct labor, and factory
overhead costs are as follows:
DIRECT MATERIALS
Cost Behavior
Units per Case
Cost per Unit
Cost per Case
Cream base
Variable
100 ozs....
Genuine Spice Inc. began operations on January 1 of the current year. The company produces eight-...
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year. The company produces eight- ounce bottles of hand and body
lotion called Eternal Beauty. The lotion is sold wholesale in
12-bottle cases for $100 per case. There is a selling commission of
$20 per case. The January direct materials, direct labor, and
factory overhead costs are as follows:
DIRECT MATERIALS
Cost Behavior
Units per Case
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Cream base
Variable
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Variable
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year. The company produces 8-ounce bottles of hand and body lotion
called Eternal Beauty. The lotion is sold wholesale in 12-bottle
cases for $100 per case. There is a selling commission of $20 per
case. The January direct materials, direct labor, and factory
overhead costs are as follows:
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Cost Behavior
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Cost per Unit
Cost per Case
Cream base
Variable
100 ozs.
$0.02
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year. The company produces 8-ounce bottles of hand and body lotion
called Eternal Beauty. The lotion is sold wholesale in 12-bottle
cases for $100 per case. There is a selling commission of $20 per
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overhead costs are as follows:
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