Cost of Goods Manufactured, using Variable Costing and Absorption CostingOn March 31, the end of the first year of operations, Barnard Inc., manufactured 2,700 units and sold 2,300 units. The following income statement was prepared, based on the variable costing concept:Barnard Inc.Variable Costing Income StatementFor the Year Ended March 31, 20Y1Sales $598,000 Variable cost of goods sold: Variable cost of goods manufactured$337,500 Inventory, March 31(50,000) Total variable cost of goods sold (287,500) Manufacturing margin $310,500 Total variable selling and administrative expenses (71,300) Contribution margin $239,200 Fixed costs: Fixed manufacturing costs$153,900 Fixed selling and administrative expenses48,300 Total fixed costs (202,200) Operating income $37,000 Determine the unit cost of goods manufactured, based on (a) the variable costing concept and (b) the absorption costing concept.Variable costing$Absorption costing$

The unit cost is calculated as total cost divided by number of units. The variable costing assumes…

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Cost of Goods Manufactured, using Variable Costing and Absorption Costing

On March 31, the end of the first year of operations, Barnard Inc., manufactured 2,700 units and sold 2,300 units. The following income statement was prepared, based on the variable costing concept:

Barnard Inc. Variable Costing Income Statement For the Year Ended March 31, 20Y1
Sales		$598,000
Variable cost of goods sold:
Variable cost of goods manufactured	$337,500
Inventory, March 31	(50,000)
Total variable cost of goods sold		(287,500)
Manufacturing margin		$310,500
Total variable selling and administrative expenses		(71,300)
Contribution margin		$239,200
Fixed costs:
Fixed manufacturing costs	$153,900
Fixed selling and administrative expenses	48,300
Total fixed costs		(202,200)
Operating income		$37,000

Determine the unit cost of goods manufactured, based on (a) the variable costing concept and (b) the absorption costing concept.

Variable costing	$
Absorption costing	$

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