Question 1 Limonade produced 11,000 cases of powdered drink mix and sold 10,000 cases in April 2010. The sale price was $25, variable costs were $10 per case ($8 manufacturing and $2 selling & administrative) and total fixed costs were $75,000 ($55,000 manufacturing and $20,000 selling & administrative). The company had no beginning inventory. Required: a) Calculate the following for Limonade i) The total cost per unit ii) The value of ending inventories using marginal costing iii) The value of ending inventories using total costing b) Prepare the April income statement using variable costing.
Question 1 Limonade produced 11,000 cases of powdered drink mix and sold 10,000 cases in April 2010. The sale price was $25, variable costs were $10 per case ($8 manufacturing and $2 selling & administrative) and total fixed costs were $75,000 ($55,000 manufacturing and $20,000 selling & administrative). The company had no beginning inventory. Required: a) Calculate the following for Limonade i) The total cost per unit ii) The value of ending inventories using marginal costing iii) The value of ending inventories using total costing b) Prepare the April income statement using variable costing.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter20: Inventory Management: Economic Order Quantity, Jit, And The Theory Of Constraints
Section: Chapter Questions
Problem 6E: Ottis, Inc., uses 640,000 plastic housing units each year in its production of paper shredders. The...
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Question 1
Limonade produced 11,000 cases of powdered drink mix and sold 10,000 cases in April 2010.
The sale price was $25, variable costs were $10 per case ($8 manufacturing and $2 selling &
administrative) and total fixed costs were $75,000 ($55,000 manufacturing and $20,000
selling & administrative).
The company had no beginning inventory.
Required:
a) Calculate the following for Limonade
i) The total cost per unit
ii) The value of ending inventories using marginal costing
iii) The value of ending inventories using total costing
b) Prepare the April income statement using variable costing.
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b) Prepare the April income statement using variable costing.
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