Question
In: Accounting
Corporation has provided the following data for its two most recent years of operation: Selling price...
Corporation has provided the following data for its two most recent years of operation:
| Selling price per unit | $50 |
| Manufacturing costs: | |
| Direct materials | $10 |
| Direct labor | $6 |
| Variable manufacturing overhead | $5 |
| Fixed manufacturing overhead per year | $72,000 |
| Selling and administrative expenses: | |
| Variable selling and administrative expense per unit sold | $5 |
| Fixed selling and administrative expense per year | $70,000 |
| Year 1 | Year 2 | |
| Units in beginning inventory | 0 | 3,000 |
| Units produced during the year | 9,000 | 8,000 |
| Units sold during the year | 6,000 | 9,000 |
| Units in ending inventory | 3,000 | 2,000 |
A. The unit product cost under variable costing in Year 1 is?
B. The net operating income (loss) under variable costing in Year 1 is?
C. The unit product cost under absorption costing in Year 2 is?
D. Assuming first-in first-out, net operating income (loss) under absorption costing in Year 2 is?
Solutions
Expert Solution
Answer to Requirement
A.
Variable Costing Unit Product Cost = Direct Materials + Direct
Labor + Variable Manufacturing Overhead
Variable Costing Unit Product Cost = $10 + $6 + $5
Variable Costing Unit Product Cost = $21
Variable Costing Unit Product Cost for Year 2 = $21
Answer to Requirement
C.
Year 1:
Fixed Manufacturing Overhead per Unit = Fixed Manufacturing
Overhead / Units produced
Fixed Manufacturing Overhead per Unit = $72,000 / 9,000
Fixed Manufacturing Overhead per Unit = $8
Absorption Costing Unit Product Cost = Direct Materials + Direct
Labor + Variable Manufacturing Overhead + Fixed Manufacturing
Overhead
Absorption Costing Unit Product Cost = $10 + $6 + $5 + $8
Absorption Costing Unit Product Cost = $29
Absorption Costing Unit Product Cost for Year 1 = $29
Year
2:
Fixed Manufacturing Overhead per Unit = Fixed Manufacturing
Overhead / Units produced
Fixed Manufacturing Overhead per Unit = $72,000 / 8,000
Fixed Manufacturing Overhead per Unit = $9
Absorption Costing Unit Product Cost = Direct Materials + Direct
Labor + Variable Manufacturing Overhead + Fixed Manufacturing
Overhead
Absorption Costing Unit Product Cost = $10 + $6 + $5 + $9
Absorption Costing Unit Product Cost = $30
Absorption Costing Unit Product Cost for Year 2 = $30
ekkarill92 answered 1 year agoRelated Solutions
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1.
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costs:
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materials
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Variable
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