Question
In: Accounting
Exercise 6-17 Siren Company builds custom fishing lures for sporting goods stores. In its first year...
Exercise 6-17
Siren Company builds custom fishing lures for sporting goods
stores. In its first year of operations, 2020, 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 | $244,400 | |
| Fixed selling and administrative expenses | $218,504 |
Siren Company sells the fishing lures for $26.00. During 2020, the
company sold 80,000 lures and produced 94,000 lures.
Prepare a variable costing income statement for 2020.
Prepare an absorption costing income statement for 2020.
Solutions
Expert Solution
Variable costing income statement :-
| Particulars | calculations | amount ($) |
| Sales | 80000 × 26 | 2080000 |
| Less :- direct material | 80000 ×7.8 | (624000) |
| Less :- direct labour | 80000 × 3.59 | (287200) |
| Less :- Variable manufacturing overhead | 80000 × 6.03 | (482400) |
| Less :- Variable selling and administrative expenses | 80000 × 4.06 | (324800) |
| Less:- closing stock (as we have taken all the cost as per unit basis then the closing stock stock should not be deducted) | 0 | 0 |
| Contribution | 361600 | |
| Less :- Fixed manufacturing overhead | (244400) | |
| Less :- Fixed selling and administrative expenses | (218504) | |
| Net income (loss) | (101304) |
Net loss as per variable costing = 101304
Absorption costing income statement :-
| Particulars | calculations | Amount ($) |
| Sales | 80000 × 26 | 2080000 |
| Less :- direct material | 90000 × 7.80 | (624000) |
| Less :- direct labour | 90000 × 3.59 | (287200) |
| Less :- variable manufacturing overhead | 90000 × 6.03 | (482400) |
| Less :- variable selling and administrative expenses | 90000 × 4.06 | (324800) |
| Less :- fixed manufacturing overhead | (244400) | |
| Less :- fixed selling and administrative expenses expenses | (218504) | |
| Add:- closing stock | 462904 × (16000 ÷ 96000) | 77151 |
| Net income (loss) | 24153 |
Net loss as per absorption costing = 24153
These are all the information required to solve the above given question.
If there is any clarifications required regarding the above provided answer, please mention them in comment box.
I hope, all the above provided explanations and calculations are useful and helpful to you.
Thank you.
ekkarill92 answered 1 year agoRelated Solutions
Exercise 20-17 Siren Company builds custom fishing lures for sporting goods stores. In its first year...
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...
Siren Company builds custom fishing lures for sporting goods stores. In its first year of operations,...
Siren Company builds custom fishing lures for sporting goods
stores. In its first year of operations, 2020, the company incurred
the following costs.
Variable Costs per Unit
Direct materials
$10.20
Direct labor
$4.69
Variable manufacturing overhead
$7.89
Variable selling and administrative expenses
$5.30
Fixed Costs per Year
Fixed manufacturing overhead
$323,000
Fixed selling and administrative expenses
$285,736
Siren Company sells the fishing lures for $34.00. During 2020,
the company sold 81,000 lures and produced 95,000 lures.
Assuming the company uses...
Siren Company builds custom fishing lures for sporting goods stores. In its first year of operations,...
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
$7.95
Direct labor
$3.66
Variable manufacturing overhead
$6.15
Variable selling and administrative expenses
$4.13
Fixed Costs per Year
Fixed manufacturing overhead
$251,750
Fixed selling and administrative expenses
$222,706
Siren Company sells the fishing lures for $26.50. During 2017, the
company sold 82,000 lures and produced 95,000 lures.
Assuming the company uses...
Siren Company builds custom fishing lures for sporting goods stores. In its first year of operations,...
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
$7.95
Direct labor
$3.66
Variable manufacturing overhead
$6.15
Variable selling and administrative expenses
$4.13
Fixed Costs per Year
Fixed manufacturing overhead
$251,750
Fixed selling and administrative expenses
$222,706
Siren Company sells the fishing lures for $26.50. During 2017, the
company sold 82,000 lures and produced 95,000 lures.
Assuming the company uses...
Siren Company builds custom fishing lures for sporting goods stores. In its first year of operations,...
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
$8.18
Direct labor
$3.76
Variable manufacturing overhead
$6.32
Variable selling and administrative expenses
$4.25
Fixed Costs per Year
Fixed manufacturing overhead
$264,810
Fixed selling and administrative expenses
$229,009
Siren Company sells the fishing lures for $27.25. During 2017, the
company sold 82,000 lures and produced 97,000 lures.
Part 1
Assuming the...
Siren Company builds custom fishing lures for sporting goods stores. In its first year of operations,...
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
$7.58
Direct labor
$3.48
Variable manufacturing
overhead
$5.86
Variable selling and administrative
expenses
$3.94
Fixed Costs per
Year
Fixed manufacturing overhead
$235,290
Fixed selling and administrative
expenses
$212,201
Siren Company sells the fishing lures for $25.25. During 2017, the
company sold 82,000 lures and produced 93,000 lures.
Assuming the company uses...
E6-17 (LO 5) Siren Company builds custom fishing lures for sporting goods stores. In its first year...
E6-17 (LO 5) Siren Company builds
custom fishing lures for sporting goods stores. In its first year
of operations, 2020, the company incurred the following costs.
Variable Costs per Unit
Direct materials
$7.50
Direct labor
$3.45
Variable manufacturing overhead
$5.80
Variable selling and administrative expenses
$3.90
Fixed Costs per Year
Fixed manufacturing overhead
$225,000
Fixed selling and administrative expenses
$210,100
Siren Company sells the fishing lures for $25. During 2020, the
company sold 80,000 lures and produced 90,000 lures.
Instructions:
a....
Trophy Fish Company supplies flies and fishing gear to sporting goods stores and outfitters throughout the...
Trophy Fish Company supplies flies and fishing gear to sporting
goods stores and outfitters throughout the western United States.
The accounts receivable clerk for Trophy Fish prepared the
following partially completed aging of receivables schedule as of
the end of business on December 31, 20Y4:
1
Not
Days Past Due
Days Past Due
Days Past Due
Days Past Due
Days Past Due
2
Past
3
Customer
Balance
Due
1-30
31-60
61-90
91-120
Over 120
4
AAA Outfitters
20,900.00
20,900.00
5...
Trophy Fish Company supplies flies and fishing gear to sporting goods stores and outfitters throughout the...
Trophy Fish Company supplies flies and fishing gear to sporting
goods stores and outfitters throughout the western United States.
The accounts receivable clerk for Trophy Fish prepared the
following partially completed aging of receivables schedule as of
the end of business on December 31, 20Y6:
1
Not
Days Past Due
Days Past Due
Days Past Due
Days Past Due
Days Past Due
2
Past
3
Customer
Balance
Due
1-30
31-60
61-90
91-120
Over 120
4
AAA Outfitters
20,000.00
20,000.00
5...
Trophy Fish Company supplies flies and fishing gear to sporting goods stores and outfitters throughout the...
Trophy Fish Company supplies flies and fishing gear to sporting
goods stores and outfitters throughout the western United States.
The accounts receivable clerk for Trophy Fish prepared the
following partially completed aging of receivables schedule as of
the end of business on December 31, 20Y4:
The following accounts were unintentionally omitted from the
aging schedule. Assume all due dates are for the current year
except for Wolfe Sports, which is due in the next year.
Customer
Due Date
Balance
Adams...
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