Exercise 6-2 (Algo) Variable Costing Income Statement; Explanation of Difference in Net Operating Income [LO6-2] Ida Company produces a handcrafted musical instrument called a gamelan that is similar to a xylophone. The gamelans are sold for $910. Selected data for the company's operations last year follow: Units in beginning inventory Units produced Units sold Units in ending inventory Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs: Fixed manufacturing overhead Fixed selling and administrative 0 300 270 30 $ 140 $ 350 $ 35 $ 15 $ 69,000 $ 26,000 The absorption costing income statement prepared by the company's accountant for last year appears below: Sales Cost of goods sold Gross margin $ 245,700 203,850 Selling and administrative expense Net operating income Required: 41,850 30,050 $ 11,800 1. Under absorption costing, how much fixed manufacturing overhead cost is included in the company's inventory at the end of last year? 2. Prepare an income statement for last year using variable costing. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare an income statement for last year using variable costing. Sales Ida Company Variable Costing Income Statement Variable expenses: Variable selling and administrative expense $ 4,170 4,170. (4,170) 0 $ (4,170)
Exercise 6-2 (Algo) Variable Costing Income Statement; Explanation of Difference in Net Operating Income [LO6-2] Ida Company produces a handcrafted musical instrument called a gamelan that is similar to a xylophone. The gamelans are sold for $910. Selected data for the company's operations last year follow: Units in beginning inventory Units produced Units sold Units in ending inventory Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs: Fixed manufacturing overhead Fixed selling and administrative 0 300 270 30 $ 140 $ 350 $ 35 $ 15 $ 69,000 $ 26,000 The absorption costing income statement prepared by the company's accountant for last year appears below: Sales Cost of goods sold Gross margin $ 245,700 203,850 Selling and administrative expense Net operating income Required: 41,850 30,050 $ 11,800 1. Under absorption costing, how much fixed manufacturing overhead cost is included in the company's inventory at the end of last year? 2. Prepare an income statement for last year using variable costing. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare an income statement for last year using variable costing. Sales Ida Company Variable Costing Income Statement Variable expenses: Variable selling and administrative expense $ 4,170 4,170. (4,170) 0 $ (4,170)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter18: Pricing And Profitability Analysis
Section: Chapter Questions
Problem 28P: The following information pertains to Vladamir, Inc., for last year: There are no work-in-process...
Related questions
Question
![Exercise 6-2 (Algo) Variable Costing Income Statement; Explanation of Difference in Net Operating
Income [LO6-2]
Ida Company produces a handcrafted musical instrument called a gamelan that is similar to a xylophone. The gamelans are sold for
$910. Selected data for the company's operations last year follow:
Units in beginning inventory
Units produced
Units sold
Units in ending inventory
Variable costs per unit:
Direct materials.
Direct labor
Variable manufacturing overhead
Variable selling and administrative
Fixed costs:
Fixed manufacturing overhead
Fixed selling and administrative
0
300
270
30
$ 140
$ 350
$ 35
$ 15
$ 69,000
$ 26,000
The absorption costing income statement prepared by the company's accountant for last year appears below:
Sales
Cost of goods sold.
Gross margin
$ 245,700
203,850
Selling and administrative expense
Net operating income
Required:
41,850
30,050
$ 11,800
1. Under absorption costing, how much fixed manufacturing overhead cost is included in the company's inventory at the end of last
year?
2. Prepare an income statement for last year using variable costing.
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Prepare an income statement for last year using variable costing.
Sales
Ida Company
Variable Costing Income Statement
Variable expenses:
Variable selling and administrative expense
$
4,170
4,170
(4,170)
0
$
(4,170)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fda15a2e9-379d-48f5-bd0b-dd343e7ae5ad%2F1eaad922-cfed-42d5-b139-abed197afa3d%2Fn6kxux_processed.png&w=3840&q=75)
Transcribed Image Text:Exercise 6-2 (Algo) Variable Costing Income Statement; Explanation of Difference in Net Operating
Income [LO6-2]
Ida Company produces a handcrafted musical instrument called a gamelan that is similar to a xylophone. The gamelans are sold for
$910. Selected data for the company's operations last year follow:
Units in beginning inventory
Units produced
Units sold
Units in ending inventory
Variable costs per unit:
Direct materials.
Direct labor
Variable manufacturing overhead
Variable selling and administrative
Fixed costs:
Fixed manufacturing overhead
Fixed selling and administrative
0
300
270
30
$ 140
$ 350
$ 35
$ 15
$ 69,000
$ 26,000
The absorption costing income statement prepared by the company's accountant for last year appears below:
Sales
Cost of goods sold.
Gross margin
$ 245,700
203,850
Selling and administrative expense
Net operating income
Required:
41,850
30,050
$ 11,800
1. Under absorption costing, how much fixed manufacturing overhead cost is included in the company's inventory at the end of last
year?
2. Prepare an income statement for last year using variable costing.
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Prepare an income statement for last year using variable costing.
Sales
Ida Company
Variable Costing Income Statement
Variable expenses:
Variable selling and administrative expense
$
4,170
4,170
(4,170)
0
$
(4,170)
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 5 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning