Spartans Golf Company sells a special putter for $20 each. In October 2023, it sold 28,000 putterswhile manufacturing 30,000. There was no beginning inventory on October 1. Production informationfor October was:Direct materials cost (per unit)Direct manufacturing labor rate (per hour)$2.00$24.00Direct manufacturing labor per unit15 minutesVariable manufacturing overhead (per unit)$4.00Variable selling expenses (per unit sold)$2.00Fixed manufacturing overhead$132,000Fixed selling and administrative costs$ 40,000(Hint: calculate the per-unit labor rates first; then calculate the per-unit variable and fixed COGS)(a) What is the amount of the inventoriable cost per unit?[Select](b) Calculate the following under Variable Costing:Revenue[Select]Cost of Goods Sold[Select]Operating Income[Select]

Variable Costing-In management accounting, variable costing is a term that refers to the income…

Answered: (a) What is the amount of the…

(a) What is the amount of the inventoriable cost per unit? (b) Calculate the following under Variable Costing: Revenue [Select] Cost of Goods Sold [Select] Select [Select]

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 21E: Ellerson Company provided the following information for the last calendar year: During the year,...

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Question

Spartans Golf Company sells a special putter for $20 each. In October 2023, it sold 28,000 putters
while manufacturing 30,000. There was no beginning inventory on October 1. Production information
for October was:
Direct materials cost (per unit)
Direct manufacturing labor rate (per hour)
$2.00
$24.00
Direct manufacturing labor per unit
15 minutes
Variable manufacturing overhead (per unit)
$4.00
Variable selling expenses (per unit sold)
$2.00
Fixed manufacturing overhead
$132,000
Fixed selling and administrative costs
$ 40,000
(Hint: calculate the per-unit labor rates first; then calculate the per-unit variable and fixed COGS)
(a) What is the amount of the inventoriable cost per unit?
[Select]
(b) Calculate the following under Variable Costing:
Revenue
[Select]
Cost of Goods Sold
[Select]
Operating Income
[Select]

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Step 1: Introduction of Variable Costing

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Step 2: Calculation of Product Cost Per Unit by Absorption and Variable Costing

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Step 3: Calculation of the Ending Inventory by Absorption and Variable Costing

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Step 4: Calculation of the Net Operating Income by Absorption Costing

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Step 5: Calculation of the Net Operating Income by Variable Costing

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