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

Expert Solution

ekkarill92 answered 8 months ago

Next > < Previous

Related 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...

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 ...

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...

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) $1,610,000 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...

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 (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: Variable selling and administrative expenses $339,500 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 1,892,100 Selling and administrative expenses: Variable selling and 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...

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 (13,500 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: Variable selling and administrative expenses $161,800 Fixed selling and administrative expenses...

Income Statements under Absorption and Variable Costing Shawnee Motors Inc. assembles and sells MP3 players. The...

Income Statements under Absorption and Variable Costing 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 (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 140,200 502,500...

Income Statements under Absorption and Variable Costing Shawnee Motors Inc. assembles and sells MP3 players. The...

Income Statements under Absorption and Variable Costing 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 $569,800 Direct labor 273,900 Variable factory overhead 136,400 Fixed factory overhead 91,300 1,071,400 Selling and administrative expenses: Variable selling and administrative expenses $166,100 Fixed selling and administrative expenses 64,300 230,400...

Subjects