Doyle & Company uses a standard costing system. The firm provides the following information about the standard cost per unit for their only product: Price $120.00 Variable manufacturing costs $80.00 Fixed manufacturing costs $20.00 Variable selling costs $3.00 Fixed selling costs $12.00 Profit $5.00 During April, the firm's accounting system reported the following actual income statement: $2,410,740.00 COGS (at standard) $2,040,000.00 Plus: Manufacturing cost variances $(8,830.00) Gross margin $361,910.00 SGA cost (at standard) $301,200.00 Plus: SGA cost variances $(9,457.50) Profit $51,252.50 Revenue The firm provides the following additional data: • For April, the firm planned to make 20,000 units and did not plan to increase or decrease its inventory. • During April, 20,600 units were made but only 20,400 units were sold. • The firm's fixed overhead spending variance was $3,000 F for April. • The firm's variable SGA cost variance was $5,107.50 U for April. • The firm allocates variable SGA costs using the number of units as its cost driver. Find the following: What is the contribution margin per unit? What is the gross margin per unit? What is the budgeted profit? What is the flexible budget profit under the gross margin format? What is the flexible budget profit under the contribution margin format? What is the sales volume variance? What is the sales price variance? What is the production volume variance?
Doyle & Company uses a standard costing system. The firm provides the following information about the standard cost per unit for their only product: Price $120.00 Variable manufacturing costs $80.00 Fixed manufacturing costs $20.00 Variable selling costs $3.00 Fixed selling costs $12.00 Profit $5.00 During April, the firm's accounting system reported the following actual income statement: $2,410,740.00 COGS (at standard) $2,040,000.00 Plus: Manufacturing cost variances $(8,830.00) Gross margin $361,910.00 SGA cost (at standard) $301,200.00 Plus: SGA cost variances $(9,457.50) Profit $51,252.50 Revenue The firm provides the following additional data: • For April, the firm planned to make 20,000 units and did not plan to increase or decrease its inventory. • During April, 20,600 units were made but only 20,400 units were sold. • The firm's fixed overhead spending variance was $3,000 F for April. • The firm's variable SGA cost variance was $5,107.50 U for April. • The firm allocates variable SGA costs using the number of units as its cost driver. Find the following: What is the contribution margin per unit? What is the gross margin per unit? What is the budgeted profit? What is the flexible budget profit under the gross margin format? What is the flexible budget profit under the contribution margin format? What is the sales volume variance? What is the sales price variance? What is the production volume variance?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Transcribed Image Text:Doyle & Company uses a standard costing system. The firm provides the following information about the standard cost
per unit for their only product:
Price
$120.00
Variable manufacturing costs $80.00
Fixed manufacturing costs
$20.00
Variable selling costs
$3.00
Fixed selling costs
$12.00
Profit
$5.00
During April, the firm's accounting system reported the following actual income statement:
Revenue
$2,410,740.00
COGS (at standard)
$2,040,000.00
Plus: Manufacturing cost variances $(8,830.00)
Gross margin
$361,910.00
SGA cost (at standard)
$301,200.00
$(9,457.50)
$51,252.50
Plus: SGA cost variances
Profit
The firm provides the following additional data:
• For April, the firm planned to make 20,000 units and did not plan to increase or decrease its inventory.
• During April, 20,600 units were made but only 20,400 units were sold.
• The firm's fixed overhead spending variance was $3,000 F for April.
• The firm's variable SGA cost variance was $5,107.50 U for April.
• The firm allocates variable SGA costs using the number of units as its cost driver.
Find the following:
What is the contribution margin per unit?
What is the gross margin per unit?
What is the budgeted profit?
What is the flexible budget profit under the gross margin format?
What is the flexible budget profit under the contribution margin format?
What is the sales volume variance?
What is the sales price variance?
What is the production volume variance?
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