Question
In: Accounting
operating-income differences. Nascar Motors assembles and sells motor vehicles and uses standard costing. Actual data relating...
operating-income differences. Nascar Motors assembles and
sells motor vehicles and uses standard costing. Actual data
relating to April and May 2017 are as follows:
The selling price per vehicle is $24,000. The budgeted level
of production used to calculate the budgeted fixed manufacturing
cost per unit is 500 units. There are no price, efficiency, or
spending variances. Any production-volume variance is written off
to cost of goods sold in the month in which it occurs.
Required:
Prepare April and May 2017 income statements for Nascar Motors
under (a) variable costing and (b) absorption costing.
17-24Weighted-average method, equivalent units. The assembly
division of Quality Time Pieces, Inc. uses the weighted-average
method of process costing. Consider the following data for the
month of May 2017:
Physical Units (Watches)
Direct Materials
Conversion Costs
Beginning work in process (May 1)a
100
$ 459,888
$ 142,570
Started in May 2017
510
Completed during May 2017
450
Ending work in process (May 31)b
160
Total costs added during May 2017
$3,237,000
$1,916,000
a Degree of completion: direct materials, 80%; conversion
costs, 35%.
b Degree of completion: direct materials, 80%; conversion
costs, 40%.
1. Required:
Compute equivalent units for direct materials and conversion
costs. Show physical units in the first column of your
schedule.
17-25 Weighted-average method, assigning costs (continuation
of 17-24).
2. Required:
For the data in Exercise 17-24, summarize the total costs to
account for, calculate the cost per equivalent unit for direct
materials and conversion costs, and assign costs to the units
completed (and transferred out) and units in ending work in
process.
17-26FIFO method, equivalent units. Refer to the information
in Exercise 17-24. Suppose the assembly division at Quality Time
Pieces, Inc. uses the FIFO method of process costing instead of the
weighted-average method.
3. Required:
Compute equivalent units for direct materials and conversion
costs. Show physical units in the first column of your
schedule.
17-27FIFO method, assigning costs (continuation of
17-26).
4. Required:
For the data in Exercise 17-24, use the FIFO method to
summarize the total costs to account for, calculate the cost per
equivalent unit for direct materials and conversion costs, and
assign costs to units completed (and transferred out) and to units
in ending work in process.
Solutions
ekkarill92 answered 1 year agoRelated Solutions
Nascar Motors assembles and sells motor vehicles and uses standard costing. Actual data relating to April...
Nascar Motors assembles and sells motor vehicles and uses
standard costing. Actual data relating to April and May 2017 are
as follows:
April
May
Unit data:
Beginning inventory
0
50
Production
600
525
Sales
550
545
Variable costs:
Manufacturing cost per unit produced
$9,000
$9,000
Operating (marketing) cost per unit sold
4,000
4,000
Fixed costs:
Manufacturing costs
$2,250,000
$2,250,000
Operating (marketing) costs
725,000
725,000
The selling price per vehicle is $29,000. The budgeted level of
production used to calculate the...
Champion Motors assembles and sells motor vehicles and uses standard costing. Actual data and variable costing...
Champion Motors assembles and sells motor vehicles and uses
standard costing. Actual data and variable costing and absorption
costing income statements relating to April and May 2017are as
follows:
April
May
Unit data:
Beginning inventory
0
150
Production
700
675
Sales
550
800
Variable costs:
Manufacturing cost per unit produced
$8,000
$8,000
Operating (marketing) cost per unit sold
3,200
3,200
Fixed costs:
Manufacturing costs
$2,100,000
$2,100,000
Operating (marketing) costs
700,000
700,000
The selling price per vehicle is $21,000. The budgeted...
9-21 Variable and absorption costing, explaining operating-income differences. Nascar Motors assembles and sells motor vehicles and...
9-21 Variable and absorption costing, explaining
operating-income differences. Nascar Motors assembles and sells
motor vehicles and uses standard costing. Actual data relating to
April and May 2017 are as follows:
April May
Unit Data:
Beginning Inventory 0 150
Production 500 400
sales 350 520
Variable Costs
Manufacturing cost per unit produced $10,000
$10,000
Operating cost per unit sold 3000 3000
Fixed Costs
Manufacturing Costs $2,000,000
$2,000,000
Operating Costs 600,000 ...
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Gallatin County Motors Inc. assembles and sells snowmobile
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100% of capacity during the first month. The following data
summarize the results for July:
Sales (11,500 units)
$1,610,000
Production costs (15,000 units):
Direct materials
$777,000
Direct labor
373,500
Variable factory overhead
186,000
Fixed factory overhead
124,500
1,461,000
Selling and administrative expenses:
Variable selling and administrative expenses
$226,500
Fixed selling and administrative expenses...
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Income Statements under Absorption Costing and Variable
Costing
Gallatin County Motors Inc. assembles and sells snowmobile
engines. The company began operations on July 1 and operated at
100% of capacity during the first month. The following data
summarize the results for July:
Sales (16,500 units)
$2,475,000
Production costs (21,000 units):
Direct materials
$1,165,500
Direct labor
558,600
Variable factory overhead
279,300
Fixed factory overhead
186,900
2,190,300
Selling and administrative expenses:
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Fixed selling and administrative expenses...
Income Statements under Absorption Costing and Variable Costing Gallatin County Motors Inc. assembles and sells snowmobile...
Income Statements under Absorption Costing and Variable Costing
Gallatin County Motors Inc. assembles and sells snowmobile engines.
The company began operations on July 1 and operated at 100% of
capacity during the first month. The following data summarize the
results for July: Sales (13,000 units) $2,080,000 Production costs
(17,000 units): Direct materials $1,006,400 Direct labor 482,800
Variable factory overhead 241,400 Fixed factory overhead 161,500
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administrative expenses $293,300 Fixed selling and administrative
expenses...
Income Statements under Absorption Costing and Variable Costing Gallatin County Motors Inc. assembles and sells snowmobile...
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Costing
Gallatin County Motors Inc. assembles and sells snowmobile
engines. The company began operations on July 1 and operated at
100% of capacity during the first month. The following data
summarize the results for July:
Sales (13,500 units)
$1,215,000
Production costs (17,000 units):
Direct materials
$566,100
Direct labor
272,000
Variable factory overhead
136,000
Fixed factory overhead
90,100
1,064,200
Selling and administrative expenses:
Variable selling and administrative expenses
$165,000
Fixed selling and administrative expenses...
Income Statements under Absorption Costing and Variable Costing Gallatin County Motors Inc. assembles and sells snowmobile...
Income Statements under Absorption Costing and Variable
Costing
Gallatin County Motors Inc. assembles and sells snowmobile
engines. The company began operations on July 1 and operated at
100% of capacity during the first month. The following data
summarize the results for July:
Sales (11,500 units)
$1,150,000
Production costs (15,000 units):
Direct materials
$555,000
Direct labor
267,000
Variable factory overhead
133,500
Fixed factory overhead
88,500
1,044,000
Selling and administrative expenses:
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began operations on August 1 and operated at 100% of capacity
during the first month. The following data summarize the results
for August:
Sales (16,500 units)
$2,640,000
Production costs (21,000 units):
Direct materials
$1,243,200
Direct labor
596,400
Variable factory overhead
298,200
Fixed factory overhead
199,500
2,337,300
Selling and administrative expenses:
Variable selling and administrative expenses
$362,300
Fixed selling and administrative expenses
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502,500...
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Shawnee Motors Inc. assembles and sells MP3 players. The company
began operations on August 1 and operated at 100% of capacity
during the first month. The following data summarize the results
for August:
Sales (8,500 units)
$1,190,000
Production costs (11,000 units):
Direct materials
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Direct labor
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Variable factory overhead
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Fixed factory overhead
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1,071,400
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Fixed selling and administrative expenses
64,300
230,400...
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