Tami Tyler opened Tami’s Creations, Inc., a small manufacturing company, at the beginning of the year. Getting the company through its first quarter of operations placed a considerable strain on Ms. Tyler’s personal finances. The following income statement for the first quarter was prepared by a friend who has just completed a course in managerial accounting at State University.
|
Tami’s Creations, Inc. Income Statement For the Quarter Ended March 31 |
||||||
| Sales (24,000 units) | $ | 871,200 | ||||
| Variable expenses: | ||||||
| Variable cost of goods sold | $ | 285,600 | ||||
| Variable selling and administrative | 187,200 | 472,800 | ||||
| Contribution margin | 398,400 | |||||
| Fixed expenses: | ||||||
| Fixed manufacturing overhead | 226,800 | |||||
| Fixed selling and administrative | 221,000 | 447,800 | ||||
| Net operating loss | $ | ( 49,400) | ||||
Ms. Tyler is discouraged over the loss shown for the quarter, particularly because she had planned to use the statement as support for a bank loan. Another friend, a CPA, insists that the company should be using absorption costing rather than variable costing and argues that if absorption costing had been used the company probably would have reported at least some profit for the quarter.
At this point, Ms. Tyler is manufacturing only one product—a swimsuit. Production and cost data relating to the swimsuit for the first quarter follow:
| Units produced | 27,000 | |||
| Units sold | 24,000 | |||
| Variable costs per unit: | ||||
| Direct materials | $ | 7.40 | ||
| Direct labor | $ | 3.00 | ||
| Variable manufacturing overhead | $ | 1.50 | ||
| Variable selling and administrative | $ | 7.80 | ||
Required:
1. Complete the following:
a. Compute the unit product cost under absorption costing.
b. What is the company’s absorption costing net operating income (loss) for the quarter?
c. Reconcile the variable and absorption costing net operating income (loss) figures.
3. During the second quarter of operations, the company again produced 27,000 units but sold 30,000 units. (Assume no change in total fixed costs.)
a. What is the company’s variable costing net operating income (loss) for the second quarter?
b. What is the company’s absorption costing net operating income (loss) for the second quarter?
c. Reconcile the variable costing and absorption costing net operating incomes for the second quarter.
In: Accounting
Tami Tyler opened Tami’s Creations, Inc., a small manufacturing company, at the beginning of the year. Getting the company through its first quarter of operations placed a considerable strain on Ms. Tyler’s personal finances. The following income statement for the first quarter was prepared by a friend who has just completed a course in managerial accounting at State University. Tami’s Creations, Inc. Income Statement For the Quarter Ended March 31 Sales (28,200 units) $ 1,128,000 Variable expenses: Variable cost of goods sold $ 448,380 Variable selling and administrative 191,760 640,140 Contribution margin 487,860 Fixed expenses: Fixed manufacturing overhead 274,560 Fixed selling and administrative 226,500 501,060 Net operating loss $ ( 13,200) Ms. Tyler is discouraged over the loss shown for the quarter, particularly because she had planned to use the statement as support for a bank loan. Another friend, a CPA, insists that the company should be using absorption costing rather than variable costing and argues that if absorption costing had been used the company probably would have reported at least some profit for the quarter. At this point, Ms. Tyler is manufacturing only one product—a swimsuit. Production and cost data relating to the swimsuit for the first quarter follow: Units produced 31,200 Units sold 28,200 Variable costs per unit: Direct materials $ 7.20 Direct labor $ 7.00 Variable manufacturing overhead $ 1.70 Variable selling and administrative $ 6.80 Required: 1. Complete the following: a. Compute the unit product cost under absorption costing. b. What is the company’s absorption costing net operating income (loss) for the quarter? c. Reconcile the variable and absorption costing net operating income (loss) figures. 3. During the second quarter of operations, the company again produced 31,200 units but sold 34,200 units. (Assume no change in total fixed costs.) a. What is the company’s variable costing net operating income (loss) for the second quarter? b. What is the company’s absorption costing net operating income (loss) for the second quarter? c. Reconcile the variable costing and absorption costing net operating incomes for the second quarter
In: Accounting
Tami Tyler opened Tami’s Creations, Inc., a small manufacturing company, at the beginning of the year. Getting the company through its first quarter of operations placed a considerable strain on Ms. Tyler’s personal finances. The following income statement for the first quarter was prepared by a friend who has just completed a course in managerial accounting at State University.
|
Tami’s Creations, Inc. Income Statement For the Quarter Ended March 31 |
||||||
| Sales (28,100 units) | $ | 1,124,000 | ||||
| Variable expenses: | ||||||
| Variable cost of goods sold | $ | 463,650 | ||||
| Variable selling and administrative | 195,295 | 658,945 | ||||
| Contribution margin | 465,055 | |||||
| Fixed expenses: | ||||||
| Fixed manufacturing overhead | 279,900 | |||||
| Fixed selling and administrative | 198,655 | 478,555 | ||||
| Net operating loss | $ | ( 13,500) | ||||
Ms. Tyler is discouraged over the loss shown for the quarter, particularly because she had planned to use the statement as support for a bank loan. Another friend, a CPA, insists that the company should be using absorption costing rather than variable costing and argues that if absorption costing had been used the company probably would have reported at least some profit for the quarter.
At this point, Ms. Tyler is manufacturing only one product—a swimsuit. Production and cost data relating to the swimsuit for the first quarter follow:
| Units produced | 31,100 | |||
| Units sold | 28,100 | |||
| Variable costs per unit: | ||||
| Direct materials | $ | 7.60 | ||
| Direct labor | $ | 7.00 | ||
| Variable manufacturing overhead | $ | 1.90 | ||
| Variable selling and administrative | $ | 6.95 | ||
Required:
1. Complete the following:
a. Compute the unit product cost under absorption costing.
b. What is the company’s absorption costing net operating income (loss) for the quarter?
c. Reconcile the variable and absorption costing net operating income (loss) figures.
3. During the second quarter of operations, the company again produced 31,100 units but sold 34,100 units. (Assume no change in total fixed costs.)
a. What is the company’s variable costing net operating income (loss) for the second quarter?
b. What is the company’s absorption costing net operating income (loss) for the second quarter?
c. Reconcile the variable costing and absorption costing net operating incomes for the second quarter.
In: Accounting
Tami Tyler opened Tami’s Creations, Inc., a small manufacturing company, at the beginning of the year. Getting the company through its first quarter of operations placed a considerable strain on Ms. Tyler’s personal finances. The following income statement for the first quarter was prepared by a friend who has just completed a course in managerial accounting at State University.
|
Tami’s Creations, Inc. Income Statement For the Quarter Ended March 31 |
||||||
| Sales (28,600 units) | $ | 1,144,000 | ||||
| Variable expenses: | ||||||
| Variable cost of goods sold | $ | 466,180 | ||||
| Variable selling and administrative | 200,200 | 666,380 | ||||
| Contribution margin | 477,620 | |||||
| Fixed expenses: | ||||||
| Fixed manufacturing overhead | 284,400 | |||||
| Fixed selling and administrative | 206,720 | 491,120 | ||||
| Net operating loss | $ | ( 13,500) | ||||
Ms. Tyler is discouraged over the loss shown for the quarter, particularly because she had planned to use the statement as support for a bank loan. Another friend, a CPA, insists that the company should be using absorption costing rather than variable costing and argues that if absorption costing had been used the company probably would have reported at least some profit for the quarter.
At this point, Ms. Tyler is manufacturing only one product—a swimsuit. Production and cost data relating to the swimsuit for the first quarter follow:
| Units produced | 31,600 | |||
| Units sold | 28,600 | |||
| Variable costs per unit: | ||||
| Direct materials | $ | 7.30 | ||
| Direct labor | $ | 7.10 | ||
| Variable manufacturing overhead | $ | 1.90 | ||
| Variable selling and administrative | $ | 7.00 | ||
Required:
1. Complete the following:
a. Compute the unit product cost under absorption costing.
b. What is the company’s absorption costing net operating income (loss) for the quarter?
c. Reconcile the variable and absorption costing net operating income (loss) figures.
3. During the second quarter of operations, the company again produced 31,600 units but sold 34,600 units. (Assume no change in total fixed costs.)
a. What is the company’s variable costing net operating income (loss) for the second quarter?
b. What is the company’s absorption costing net operating income (loss) for the second quarter?
c. Reconcile the variable costing and absorption costing net operating incomes for the second quarter.
In: Accounting
Tami Tyler opened Tami’s Creations, Inc., a small manufacturing company, at the beginning of the year. Getting the company through its first quarter of operations placed a considerable strain on Ms. Tyler’s personal finances. The following income statement for the first quarter was prepared by a friend who has just completed a course in managerial accounting at State University.
|
Tami’s Creations, Inc. Income Statement For the Quarter Ended March 31 |
||||||
| Sales (22,000 units) | $ | 798,600 | ||||
| Variable expenses: | ||||||
| Variable cost of goods sold | $ | 272,800 | ||||
| Variable selling and administrative | 174,900 | 447,700 | ||||
| Contribution margin | 350,900 | |||||
| Fixed expenses: | ||||||
| Fixed manufacturing overhead | 205,000 | |||||
| Fixed selling and administrative | 218,000 | 423,000 | ||||
| Net operating loss | $ | ( 72,100) | ||||
Ms. Tyler is discouraged over the loss shown for the quarter, particularly because she had planned to use the statement as support for a bank loan. Another friend, a CPA, insists that the company should be using absorption costing rather than variable costing and argues that if absorption costing had been used the company probably would have reported at least some profit for the quarter.
At this point, Ms. Tyler is manufacturing only one product—a swimsuit. Production and cost data relating to the swimsuit for the first quarter follow:
| Units produced | 25,000 | |||
| Units sold | 22,000 | |||
| Variable costs per unit: | ||||
| Direct materials | $ | 7.60 | ||
| Direct labor | $ | 2.90 | ||
| Variable manufacturing overhead | $ | 1.90 | ||
| Variable selling and administrative | $ | 7.95 | ||
Required:
1. Complete the following:
a. Compute the unit product cost under absorption costing.
b. What is the company’s absorption costing net operating income (loss) for the quarter?
c. Reconcile the variable and absorption costing net operating income (loss) figures.
3. During the second quarter of operations, the company again produced 25,000 units but sold 28,000 units. (Assume no change in total fixed costs.)
a. What is the company’s variable costing net operating income (loss) for the second quarter?
b. What is the company’s absorption costing net operating income (loss) for the second quarter?
c. Reconcile the variable costing and absorption costing net operating incomes for the second quarter.
In: Accounting
Tami Tyler opened Tami’s Creations, Inc., a small manufacturing company, at the beginning of the year. Getting the company through its first quarter of operations placed a considerable strain on Ms. Tyler’s personal finances. The following income statement for the first quarter was prepared by a friend who has just completed a course in managerial accounting at State University.
|
Tami’s Creations, Inc. Income Statement For the Quarter Ended March 31 |
||||||
| Sales (28,500 units) | $ | 1,140,000 | ||||
| Variable expenses: | ||||||
| Variable cost of goods sold | $ | 436,050 | ||||
| Variable selling and administrative | 192,375 | 628,425 | ||||
| Contribution margin | 511,575 | |||||
| Fixed expenses: | ||||||
| Fixed manufacturing overhead | 252,000 | |||||
| Fixed selling and administrative | 271,575 | 523,575 | ||||
| Net operating loss | $ | ( 12,000) | ||||
Ms. Tyler is discouraged over the loss shown for the quarter, particularly because she had planned to use the statement as support for a bank loan. Another friend, a CPA, insists that the company should be using absorption costing rather than variable costing and argues that if absorption costing had been used the company probably would have reported at least some profit for the quarter.
At this point, Ms. Tyler is manufacturing only one product—a swimsuit. Production and cost data relating to the swimsuit for the first quarter follow:
| Units produced | 31,500 | |||
| Units sold | 28,500 | |||
| Variable costs per unit: | ||||
| Direct materials | $ | 7.10 | ||
| Direct labor | $ | 6.30 | ||
| Variable manufacturing overhead | $ | 1.90 | ||
| Variable selling and administrative | $ | 6.75 | ||
Required:
1. Complete the following:
a. Compute the unit product cost under absorption costing.
b. What is the company’s absorption costing net operating income (loss) for the quarter?
c. Reconcile the variable and absorption costing net operating income (loss) figures.
3. During the second quarter of operations, the company again produced 31,500 units but sold 34,500 units. (Assume no change in total fixed costs.)
a. What is the company’s variable costing net operating income (loss) for the second quarter?
b. What is the company’s absorption costing net operating income (loss) for the second quarter?
c. Reconcile the variable costing and absorption costing net operating incomes for the second quarter.
In: Accounting
Tami Tyler opened Tami’s Creations, Inc., a small manufacturing company, at the beginning of the year. Getting the company through its first quarter of operations placed a considerable strain on Ms. Tyler’s personal finances. The following income statement for the first quarter was prepared by a friend who has just completed a course in managerial accounting at State University. Tami’s Creations, Inc. Income Statement For the Quarter Ended March 31 Sales (28,700 units) $ 1,148,000 Variable expenses: Variable cost of goods sold $ 456,330 Variable selling and administrative 192,290 648,620 Contribution margin 499,380 Fixed expenses: Fixed manufacturing overhead 253,600 Fixed selling and administrative 257,780 511,380 Net operating loss $ ( 12,000) Ms. Tyler is discouraged over the loss shown for the quarter, particularly because she had planned to use the statement as support for a bank loan. Another friend, a CPA, insists that the company should be using absorption costing rather than variable costing and argues that if absorption costing had been used the company probably would have reported at least some profit for the quarter. At this point, Ms. Tyler is manufacturing only one product—a swimsuit. Production and cost data relating to the swimsuit for the first quarter follow: Units produced 31,700 Units sold 28,700 Variable costs per unit: Direct materials $ 7.60 Direct labor $ 6.40 Variable manufacturing overhead $ 1.90 Variable selling and administrative $ 6.70 Required: 1. Complete the following: a. Compute the unit product cost under absorption costing. b. What is the company’s absorption costing net operating income (loss) for the quarter? c. Reconcile the variable and absorption costing net operating income (loss) figures. 3. During the second quarter of operations, the company again produced 31,700 units but sold 34,700 units. (Assume no change in total fixed costs.) a. What is the company’s variable costing net operating income (loss) for the second quarter? b. What is the company’s absorption costing net operating income (loss) for the second quarter? c. Reconcile the variable costing and absorption costing net operating incomes for the second quarter
In: Accounting
Tami Tyler opened Tami’s Creations, Inc., a small manufacturing company, at the beginning of the year. Getting the company through its first quarter of operations placed a considerable strain on Ms. Tyler’s personal finances. The following income statement for the first quarter was prepared by a friend who has just completed a course in managerial accounting at State University.
|
Tami’s Creations, Inc. Income Statement For the Quarter Ended March 31 |
||||||
| Sales (28,450 units) | $ | 1,138,000 | ||||
| Variable expenses: | ||||||
| Variable cost of goods sold | $ | 440,975 | ||||
| Variable selling and administrative | 193,460 | 634,435 | ||||
| Contribution margin | 503,565 | |||||
| Fixed expenses: | ||||||
| Fixed manufacturing overhead | 301,050 | |||||
| Fixed selling and administrative | 225,015 | 526,065 | ||||
| Net operating loss | $ | ( 22,500) | ||||
Ms. Tyler is discouraged over the loss shown for the quarter, particularly because she had planned to use the statement as support for a bank loan. Another friend, a CPA, insists that the company should be using absorption costing rather than variable costing and argues that if absorption costing had been used the company probably would have reported at least some profit for the quarter.
At this point, Ms. Tyler is manufacturing only one product—a swimsuit. Production and cost data relating to the swimsuit for the first quarter follow:
| Units produced | 33,450 | |||
| Units sold | 28,450 | |||
| Variable costs per unit: | ||||
| Direct materials | $ | 7.50 | ||
| Direct labor | $ | 6.20 | ||
| Variable manufacturing overhead | $ | 1.80 | ||
| Variable selling and administrative | $ | 6.80 | ||
Required:
1. Complete the following:
a. Compute the unit product cost under absorption costing.
b. What is the company’s absorption costing net operating income (loss) for the quarter?
c. Reconcile the variable and absorption costing net operating income (loss) figures.
3. During the second quarter of operations, the company again produced 33,450 units but sold 38,450 units. (Assume no change in total fixed costs.)
a. What is the company’s variable costing net operating income (loss) for the second quarter?
b. What is the company’s absorption costing net operating income (loss) for the second quarter?
c. Reconcile the variable costing and absorption costing net operating incomes for the second quarter.
In: Accounting
Tami Tyler opened Tami’s Creations, Inc., a small manufacturing company, at the beginning of the year. Getting the company through its first quarter of operations placed a considerable strain on Ms. Tyler’s personal finances. The following income statement for the first quarter was prepared by a friend who has just completed a course in managerial accounting at State University.
|
Tami’s Creations, Inc. Income Statement For the Quarter Ended March 31 |
||||||
| Sales (28,500 units) | $ | 1,140,000 | ||||
| Variable expenses: | ||||||
| Variable cost of goods sold | $ | 458,850 | ||||
| Variable selling and administrative | 196,650 | 655,500 | ||||
| Contribution margin | 484,500 | |||||
| Fixed expenses: | ||||||
| Fixed manufacturing overhead | 283,500 | |||||
| Fixed selling and administrative | 214,500 | 498,000 | ||||
| Net operating loss | $ | ( 13,500) | ||||
Ms. Tyler is discouraged over the loss shown for the quarter, particularly because she had planned to use the statement as support for a bank loan. Another friend, a CPA, insists that the company should be using absorption costing rather than variable costing and argues that if absorption costing had been used the company probably would have reported at least some profit for the quarter.
At this point, Ms. Tyler is manufacturing only one product—a swimsuit. Production and cost data relating to the swimsuit for the first quarter follow:
| Units produced | 31,500 | |||
| Units sold | 28,500 | |||
| Variable costs per unit: | ||||
| Direct materials | $ | 7.40 | ||
| Direct labor | $ | 6.80 | ||
| Variable manufacturing overhead | $ | 1.90 | ||
| Variable selling and administrative | $ | 6.90 | ||
Required:
1. Complete the following:
a. Compute the unit product cost under absorption costing.
b. What is the company’s absorption costing net operating income (loss) for the quarter?
c. Reconcile the variable and absorption costing net operating income (loss) figures.
3. During the second quarter of operations, the company again produced 31,500 units but sold 34,500 units. (Assume no change in total fixed costs.)
a. What is the company’s variable costing net operating income (loss) for the second quarter?
b. What is the company’s absorption costing net operating income (loss) for the second quarter?
c. Reconcile the variable costing and absorption costing net operating incomes for the second quarter.
In: Accounting
Tami Tyler opened Tami’s Creations, Inc., a small manufacturing
company, at the beginning of the year. Getting the company through
its first quarter of operations placed a considerable strain on Ms.
Tyler’s personal finances. The following income statement for the
first quarter was prepared by a friend who has just completed a
course in managerial accounting at State University.
Tami’s Creations, Inc.
Income Statement
For the Quarter Ended March 31
Sales (28,300 units)
$ 1,132,000
Variable expenses:
Variable cost of goods sold $
416,010
Variable selling and administrative
195,270 611,280
Contribution margin
520,720
Fixed expenses:
Fixed manufacturing overhead
299,700
Fixed selling and administrative
243,520 543,220
Net operating loss
$ ( 22,500)
Ms. Tyler is discouraged over the loss shown for the quarter,
particularly because she had planned to use the statement as
support for a bank loan. Another friend, a CPA, insists that the
company should be using absorption costing rather than variable
costing and argues that if absorption costing had been used the
company probably would have reported at least some profit for the
quarter.
At this point, Ms. Tyler is manufacturing only one product—a
swimsuit. Production and cost data relating to the swimsuit for the
first quarter follow:
Units produced 33,300
Units sold 28,300
Variable costs per unit:
Direct materials $ 7.30
Direct labor $ 5.70
Variable manufacturing overhead
$ 1.70
Variable selling and administrative
$ 6.90
Required:
1. Complete the following:
a. Compute the unit product cost under absorption costing.
b. What is the company’s absorption costing net operating income
(loss) for the quarter?
c. Reconcile the variable and absorption costing net operating
income (loss) figures.
3. During the second quarter of operations, the company again
produced 33,300 units but sold 38,300 units. (Assume no change in
total fixed costs.)
a. What is the company’s variable costing net operating income
(loss) for the second quarter?
b. What is the company’s absorption costing net operating income
(loss) for the second quarter?
c. Reconcile the variable costing and absorption costing net
operating incomes for the second quarter
In: Accounting