Zahra's Decorative produces and sells a decorative pillow for $97.50 per unit. In the first month of operation, 2,000 units were produced, and 1,750 units were sold. Actual fixed costs are the same as the amount budgeted for the month. Other information for the month includes: Variable manufacturing costs (DM, DL, Var Overhead) $22.10 per unit Variable marketing costs (Commission, shipping, supplies) $ 3.90 per unit Fixed manufacturing costs $13.00 per unit Administrative expenses, all fixed $19.50 per unit Ending inventories: RM Inventory -0- WIP Inventory -0- Finished goods Inventory 250 units Compute the operating income using absorption costing.
Zahra's Decorative produces and sells a decorative pillow for $97.50 per unit. In the first month of operation, 2,000 units were produced, and 1,750 units were sold. Actual fixed costs are the same as the amount budgeted for the month. Other information for the month includes: Variable manufacturing costs (DM, DL, Var Overhead) $22.10 per unit Variable marketing costs (Commission, shipping, supplies) $ 3.90 per unit Fixed manufacturing costs $13.00 per unit Administrative expenses, all fixed $19.50 per unit Ending inventories: RM Inventory -0- WIP Inventory -0- Finished goods Inventory 250 units Compute the operating income using absorption costing.
Chapter10: Short-term Decision Making
Section: Chapter Questions
Problem 6PA: Gent Designs requires three units of part A for every unit of Al that it produces. Currently, part A...
Related questions
Question
Zahra's Decorative produces and sells a decorative pillow for $97.50 per unit. In the first month of operation, 2,000 units were produced, and 1,750 units were sold. Actual fixed costs are the same as the amount budgeted for the month. Other information for the month includes:
Variable |
$22.10 per unit |
Variable marketing costs (Commission, shipping, supplies) | $ 3.90 per unit |
Fixed manufacturing costs | $13.00 per unit |
Administrative expenses, all fixed | $19.50 per unit |
Ending inventories: | |
RM Inventory | -0- |
WIP Inventory | -0- |
Finished goods Inventory | 250 units |
Compute the operating income using absorption costing.
For 2019, Kim, Inc., had production of 200,000 units and sales of 160,000 units. Selling price is $6 per unit. There was no beginning inventory. Other information for the year included:
Direct manufacturing labor | $228,000 |
Variable manufacturing overhead | 120,000 |
Direct materials | 180,000 |
Variable selling expenses | 144,000 |
Fixed administrative expenses | 96,000 |
Fixed manufacturing overhead | 216,000 |
Compute net income under absorption costing.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Recommended textbooks for you
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning