Question
In: Accounting
Yale Company manufactures hair brushes that sell at wholesale for $3 per unit. The company had...
Yale Company manufactures hair brushes that sell at wholesale for $3 per unit. The company had no beginning inventory in the prior year. These data summarize the current and prior year operations:
| Prior Year | Current Year | |||||
| Sales | 3,500 | units | 7,300 | units | ||
| Production | 5,400 | units | 5,400 | units | ||
| Production cost | ||||||
| Factory—variable (per unit) | $ | 0.60 | $ | 0.60 | ||
| —fixed | $ | 2,700 | $ | 2,700 | ||
| Marketing—variable | $ | 0.40 | $ | 0.40 | ||
| Administrative—fixed | $ | 500 | $ | 500 | ||
Required: 1. Prepare an income statement for each year based on full costing. 2. Prepare an income statement for each year based on variable costing. 3. Prepare a reconciliation of the difference each year in the operating income resulting from using the full costing method and variable costing method.
PLEASE ANSWER WITH EXPLANATIONS ASAP, THANK YOU!
Solutions
ekkarill92 answered 1 year agoRelated Solutions
Yale Company manufactures hair brushes that sell at wholesale for $3 per unit. The company had...
Yale Company manufactures hair brushes that sell at wholesale
for $3 per unit. The company had no beginning inventory in the
prior year. These data summarize the current and prior year
operations:
Prior Year
Current Year
Sales
2,300
units
3,700
units
Production
3,000
units
3,000
units
Production cost
Factory—variable (per unit)
$
0.60
$
0.60
—fixed
$
1,500
$
1,500
Marketing—variable
$
0.40
$
0.40
Administrative—fixed
$
500
$
500
Required:
1. Prepare an income statement for each year based...
Yale Company manufactures hair brushes that sell at wholesale for $3 per unit. The company had...
Yale Company manufactures hair brushes that sell at wholesale
for $3 per unit. The company had no beginning inventory in the
prior year. These data summarize the current and prior year
operations:
Prior Year
Current Year
Sales
2,600
units
4,600
units
Production
3,600
units
3,600
units
Production cost
Factory—variable (per unit)
$
0.60
$
0.60
—fixed
$
1,800
$
1,800
Marketing—variable
$
0.40
$
0.40
Administrative—fixed
$
500
$
500
Required:
1. Prepare an income statement for each year based...
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for $2.60 per unit. Budgeted production in both 2018 and 2019 was
3,800 units. There was no beginning inventory in 2018. The
following data summarized the 2018 and 2019 operations:
2018
2019
Units sold
2,900
4,000
Units produced
3,800
3,800
Costs:
Variable factory overhead per unit
$
0.55
$
0.65
Fixed factory overhead
$
1,710
$
1,710
Variable marketing per unit
$
0.75
$
1.00
Fixed Selling and Administrative
$
650...
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HairNeat Inc. manufactures hair brushes that sell at wholesale
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following data summarized the 2016 and 2017 operations:
2016
2017
Units sold
2,500
3,200
Units produced
3,000
3,000
Costs:
Variable manufacturing costs per unit
$0.65
$0.65
Fixed factory overhead
$1,290
$1,290
Variable marketing per unit
$0.80
$0.80
Fixed Selling and Administrative
$650
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Absorption costing operating income for 2017...
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3,000 units. There was no beginning inventory in 2015. The
following data summarized the 2015 and 2016 operations: 2015 2016
Units sold 2,500 3,200 Units produced 3,000 3,000 Costs: Variable
factory overhead per unit $0.65 $0.65 Fixed factory overhead $1,290
$1,290 Variable marketing per unit $0.80 $0.80 Fixed Selling and
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operating income for its first two years of operations. Cost
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direct material per unit produced
$33
Direct labor cost per unit produced
$13
Variable manufacturing overhead (MOH) per unit produced
$7
Variable operating expenses per unit sold
$3
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costs on a per unit basis, when 20,000 units per
month are sold, are as follows:
Manufacturing costs:
Direct materials used $2.00
Direct
labour
$1.00
MOH variable
$1.20
MOH
fixed
$1.10
Selling expenses
Variable
$4.00
Fixed
$1.10
Sale price per
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