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 | $ | 438,650 | ||||
| Variable selling and administrative | 189,610 | 628,260 | ||||
| Contribution margin | 503,740 | |||||
| Fixed expenses: | ||||||
| Fixed manufacturing overhead | 250,400 | |||||
| Fixed selling and administrative | 265,340 | 515,740 | ||||
| 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 | 31,300 | |||
| Units sold | 28,300 | |||
| Variable costs per unit: | ||||
| Direct materials | $ | 7.50 | ||
| Direct labor | $ | 6.30 | ||
| Variable manufacturing overhead | $ | 1.70 | ||
| 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 31,300 units but sold 34,300 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
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 | 188,400 | 474,000 | ||||
| Contribution margin | 397,200 | |||||
| Fixed expenses: | ||||||
| Fixed manufacturing overhead | 218,700 | |||||
| Fixed selling and administrative | 219,000 | 437,700 | ||||
| Net operating loss | $ | ( 40,500) | ||||
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 | 27,000 | |||
| Units sold | 24,000 | |||
| Variable costs per unit: | ||||
| Direct materials | $ | 7.60 | ||
| Direct labor | $ | 2.60 | ||
| Variable manufacturing overhead | $ | 1.70 | ||
| Variable selling and administrative | $ | 7.85 | ||
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 (28,100 units) | $ | 1,124,000 | ||||
| Variable expenses: | ||||||
| Variable cost of goods sold | $ | 441,170 | ||||
| Variable selling and administrative | 191,080 | 632,250 | ||||
| Contribution margin | 491,750 | |||||
| Fixed expenses: | ||||||
| Fixed manufacturing overhead | 297,900 | |||||
| Fixed selling and administrative | 216,350 | 514,250 | ||||
| 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 | 33,100 | |||
| Units sold | 28,100 | |||
| Variable costs per unit: | ||||
| Direct materials | $ | 7.60 | ||
| Direct labor | $ | 6.50 | ||
| Variable manufacturing overhead | $ | 1.60 | ||
| 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 33,100 units but sold 38,100 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 (24,000 units) | $ | 871,200 | ||||
| Variable expenses: | ||||||
| Variable cost of goods sold | $ | 292,800 | ||||
| Variable selling and administrative | 190,800 | 483,600 | ||||
| Contribution margin | 387,600 | |||||
| Fixed expenses: | ||||||
| Fixed manufacturing overhead | 229,500 | |||||
| Fixed selling and administrative | 220,000 | 449,500 | ||||
| Net operating loss | $ | ( 61,900) | ||||
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 | $ | 7.30 | ||
| Direct labor | $ | 3.00 | ||
| 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 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 (28,900 units) $ 1,156,000 Variable expenses: Variable cost of goods sold $ 427,720 Variable selling and administrative 199,410 627,130 Contribution margin 528,870 Fixed expenses: Fixed manufacturing overhead 287,100 Fixed selling and administrative 255,270 542,370 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 31,900 Units sold 28,900 Variable costs per unit: Direct materials $ 7.50 Direct labor $ 5.70 Variable manufacturing overhead $ 1.60 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 31,900 units but sold 34,900 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 | $ | 429,930 | ||||
| Variable selling and administrative | 174,220 | 604,150 | ||||
| Contribution margin | 519,850 | |||||
| Fixed expenses: | ||||||
| Fixed manufacturing overhead | 248,800 | |||||
| Fixed selling and administrative | 283,050 | 531,850 | ||||
| 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 | 31,100 | |||
| Units sold | 28,100 | |||
| Variable costs per unit: | ||||
| Direct materials | $ | 7.30 | ||
| Direct labor | $ | 6.30 | ||
| Variable manufacturing overhead | $ | 1.70 | ||
| Variable selling and administrative | $ | 6.20 | ||
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 (28,500 units) | $ | 1,140,000 | ||||
| Variable expenses: | ||||||
| Variable cost of goods sold | $ | 447,450 | ||||
| Variable selling and administrative | 199,500 | 646,950 | ||||
| Contribution margin | 493,050 | |||||
| Fixed expenses: | ||||||
| Fixed manufacturing overhead | 283,500 | |||||
| Fixed selling and administrative | 223,050 | 506,550 | ||||
| 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 | $ | 7.50 | ||
| Direct labor | $ | 6.50 | ||
| Variable manufacturing overhead | $ | 1.70 | ||
| 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 31,500 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 (28,100 units) | $ | 1,124,000 | ||||
| Variable expenses: | ||||||
| Variable cost of goods sold | $ | 413,070 | ||||
| Variable selling and administrative | 192,485 | 605,555 | ||||
| Contribution margin | 518,445 | |||||
| Fixed expenses: | ||||||
| Fixed manufacturing overhead | 276,790 | |||||
| Fixed selling and administrative | 255,005 | 531,795 | ||||
| Net operating loss | $ | ( 13,350) | ||||
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 | $ | 7.50 | ||
| Direct labor | $ | 5.70 | ||
| Variable manufacturing overhead | $ | 1.50 | ||
| Variable selling and administrative | $ | 6.85 | ||
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 (22,000 units) $ 798,600 Variable expenses: Variable cost of goods sold $ 270,600 Variable selling and administrative 172,700 443,300 Contribution margin 355,300 Fixed expenses: Fixed manufacturing overhead 200,000 Fixed selling and administrative 218,000 418,000 Net operating loss $ ( 62,700) 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 $ 7.50 Direct labor $ 2.80 Variable manufacturing overhead $ 2.00 Variable selling and administrative $ 7.85 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 (28,700 units) | $ | 1,148,000 | ||||
| Variable expenses: | ||||||
| Variable cost of goods sold | $ | 441,980 | ||||
| Variable selling and administrative | 193,725 | 635,705 | ||||
| Contribution margin | 512,295 | |||||
| Fixed expenses: | ||||||
| Fixed manufacturing overhead | 282,130 | |||||
| Fixed selling and administrative | 243,515 | 525,645 | ||||
| Net operating loss | $ | ( 13,350) | ||||
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 | $ | 7.10 | ||
| Direct labor | $ | 6.70 | ||
| Variable manufacturing overhead | $ | 1.60 | ||
| 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 31,700 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