Question

In: Accounting

The following information pertains to Chacon Inc. for last year: Beginning inventory in units 5,200 Units...

The following information pertains to Chacon Inc. for last year:

Beginning inventory in units 5,200
Units produced 20,600
Units sold 23,500
Costs per unit:
Direct materials $8.50
Direct labor $3.60
Variable overhead $1.10
Fixed overhead* $4.35
Variable selling expenses $2.80
Fixed selling and administrative expenses $23,700

* Fixed overhead totals $89,610 per year.

Assume that the selling price is $29 per unit.

1. Calculate operating income using absorption costing. Refer to the list of Labels and Amount Descriptions for the exact wording of text items within your income statement.

Score: 10/67

Chacon Inc.

Absorption-Costing Income Statement

For Last Year

1

2

3

4

5

6

7

2. Calculate operating income using variable costing. Refer to the list of Labels and Amount Descriptions for the exact wording of text items within your income statement.

Question not attempted.

Score: 0/83

Chacon Inc.

Variable-Costing Income Statement

For Last Year

1

2

3

4

5

6

7

8

9

Solutions

Expert Solution

1. Calculate operating income using absorption costing. Refer to the list of Labels and Amount Descriptions for the exact wording of text items within your income statement.

Score: 10/67

Chacon Inc.

Absorption-Costing Income Statement

For Last Year

1

Sales

681500

2

Cost of goods sold 412425

3

Gross profit 269075

4

Selling and administrative expense

5

Variable selling and administrative expense 65800

6

Fixed selling and administrative expense 23700 89500

7

Net operating income 179575

2. Calculate operating income using variable costing. Refer to the list of Labels and Amount Descriptions for the exact wording of text items within your income statement.

Question not attempted.

Score: 0/83

Chacon Inc.

Variable-Costing Income Statement

For Last Year

1

Sales 681500

2

Less: Variable cost of goods sold 310200

3

Manufacturing margin 371300

4

Variable selling and administrative expense 65800

5

Contribution margin 305500

6

Fixed cost

7

Fixed manufacturing overhead 89610

8

Fixed selling and administrative expense 23700 113310
9 Net operating income 192190

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