Denton Company manufactures and sells a single product. Cost data for the product are given: Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Total variable cost per unit. Fixed costs per month: Fixed manufacturing overhead Fixed selling and administrative Total fixed cost per month The product sells for $47 per unit. Production and sales data for July and August, the first two months of operations, follow: Units Sold 17,000 25,000 July August $3 11 4 1 $ 19 Units Produced 21,000 21,000 The company's Accounting Department has prepared the following absorption costing income statements for July and August: Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Required: 1. Determine the unit product cost under: a. Absorption costing. b. Variable costing. $ 126,000 166,000 $ 292,000 July August $ 799,000 $ 1,175,000 408,000 600,000 391,000 183,000 575,000 191,000 $ 208,000 $ 384,000 2. Prepare variable costing income statements for July and August. 3. Reconcile the variable costing and absorption costing net operating incomes.

Denton Company manufactures and sells a single product. Cost data for the product are given: Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Total variable cost per unit. Fixed costs per month: Fixed manufacturing overhead Fixed selling and administrative Total fixed cost per month The product sells for $47 per unit. Production and sales data for July and August, the first two months of operations, follow: Units Sold 17,000 25,000 July August $3 11 4 1 $ 19 Units Produced 21,000 21,000 The company's Accounting Department has prepared the following absorption costing income statements for July and August: Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Required: 1. Determine the unit product cost under: a. Absorption costing. b. Variable costing. $ 126,000 166,000 $ 292,000 July August $ 799,000 $ 1,175,000 408,000 600,000 391,000 183,000 575,000 191,000 $ 208,000 $ 384,000 2. Prepare variable costing income statements for July and August. 3. Reconcile the variable costing and absorption costing net operating incomes.

Name: Denton Company manufactures and sells a single product. Cost data for
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Description: Denton Company manufactures and sells a single product. Cost data for the product are given:Variable costs per unit:Direct materials.Direct laborVariable manufacturing overheadVariable selling and administrativeJulyAugustTotal variable cost per unit

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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