Cost of Goods Manufactured, using Variable Costing andAbsorption CostingOn March 31, the end of the first year of operations, Barnard Inc.,manufactured 3,300 units and sold 2,800 units. The followingincome statement was prepared, based on the variable costingconcept:SalesVariable cost of goods sold:Variable cost of goods manufacturedInventory, March 31Total variable cost of goods soldManufacturing marginTotal variable selling and administrative expensesContribution marginFixed costs:Barnard Inc.Variable Costing Income StatementFor the Year Ended March 31, 20Y1Fixed manufacturing costsFixed selling and administrative expensesTotal fixed costsOperating incomeVariable costingAbsorption costing$508,200(77,000)$231,00072,800$896,000(431,200)$464,800(106,400)$358,400(303,800)$54,600Determine the unit cost of goods manufactured, based on (a) thevariable costing concept and (b) the absorption costing concept.

Cost accounting is defined as the branch of accounting used by manufacturing entities in order to…

Answered: Cost of Goods Manufactured, using…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The level of inventory of a manufactured product has increased by 7,848 units during a period. The following data are also available Variable Fixed Unit manufacturing costs of the period $11.00 $3.00 Unit operating expenses of the period 2.00 5.00 The effect on operating income if variable costing is used rather than absorption costing would be a(n) Oa. $23,544 increase Ob. $62,784 decrease Oc. $62,784 increase Od. $23,544 decrease
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Please do not give solution in image format thanku
The level of inventory of a manufactured product has increased by 7,949 units during a period. The following data are also available: Variable Fixed Unit manufacturing costs of the period $12.00 $5.00 Unit operating expenses of the period 4.00 4.00 The effect on operating income if variable costing is used rather than absorption costing would be a(n) a.$71,541 decrease b.$39,745 increase c.$39,745 decrease d.$71,541 increase
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Variable Costing Income Statement On April 30, the end of the first month of operations, Joplin Company prepared the following income statement, based on the absorption costing concept: Joplin CompanyAbsorption Costing Income StatementFor the Month Ended April 30 Sales (6,600 units) $178,200 Cost of goods sold: Cost of goods manufactured (7,700 units) $146,300 Inventory, April 30 (1,100 units) (20,900) Total cost of goods sold (125,400) Gross profit $52,800 Selling and administrative expenses (32,280) Operating income $20,520 If the fixed manufacturing costs were $39,501 and the fixed selling and administrative expenses were $15,810, prepare an income statement according to the variable costing concept. Round all final answers to whole dollars. Joplin CompanyVariable Costing Income StatementFor the Month Ended April 30 $Sales Variable cost of goods sold: $Variable cost of goods manufactured…
Differential Analysis for a Discontinued Product The condensed product-line income statement for Rhinebeck Company for the month of October is as follows: Sales Cost of goods sold Gross profit Selling and administrative expenses Operating income (loss) Rhinebeck Company Revenues. Costs: Product-Line Income Statement For the Month Ended October 31 Fixed costs Variable cost of goods sold Variable selling and admin. expenses Profit (Loss) Hats Fixed costs are 15% of the cost of goods sold and 42% of the selling and administrative expenses. Rhinebeck Company assumes that fixed costs would not be materially affected if the Gloves line were discontinued. a. Prepare a differential analysis dated October 31 to determine if Mufflers should be continued (Alternative 1) or discontinued (Alternative 2). If an amount is zero, enter "0". If required, use a minus sign to indicate a loss. $65,200 (27,000) $38,200 (28,500) $9,700 Differential Analysis Continue (Alt. 1) or Discontinue (Alt. 2) Mufflers…
Michie Company's management accountant prepared the following income statement relating to its second year of operations using the absorption costing format: Michie Company Income Statement (Absorption Costing) Year Ended December 31, Year 2 Sales Cost of goods sold: Beginning inventory Variable and fixed manufacturing costs Cost of goods available for sale Less ending inventory Total cost of goods sold Gross margin Less operating costs: Variable selling and administrative costs Fixed selling and administrative costs Net income (50,000 x $ 20.00) (10,000 $ 10.00*) (45,000 x $ 10.00*) (55,000 $10.00) (5,000 * $ 10.00) $ 1,000,000 $ 100,000 450,000 550,000 50,000 (500,000) $ 500,000 (50,000 x $ 2.00) $ 100,000 150,000 Variable manufacturing costs of $8.00 plus fixed manufacturing costs of $2.00. (250,000) $ 250,000
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The level of inventory of a manufactured product has increased by 7,741 units during a period. The following data are also available: Fixed Unit manufacturing costs of the period $7.00 Unit operating expenses of the period 4.00 1.00 The effect on operating income if variable costing is used rather than absorption costing would be a[n) O $61.920 decrease Ob. 161.928 increase O$54.187 increase d. 554.107 decrease Variable $10.00
Absorption Statement Absorption costing does not distinguish between variable and fixed costs. All manufacturing costs are included in the cost of goods sold. Saxon, Inc.Absorption Costing Income StatementFor the Year Ended December 31 Sales $1,200,000 Cost of goods sold: Cost of goods manufactured $840,000 Ending inventory (168,000) Total cost of goods sold (672,000) Gross profit $528,000 Selling and administrative expenses (289,000) Operating income $239,000 Variable Statement Under variable costing, the cost of goods manufactured includes only variable manufacturing costs. This type of income statement includes a computation of manufacturing margin. Saxon, Inc.Variable Costing Income StatementFor the Year Ended December 31 Sales $1,200,000 Variable cost of goods sold: Variable cost of goods manufactured $600,000 Ending inventory (120,000) Total variable cost of goods sold (480,000) Manufacturing…

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