Grainger Company produces only one product and sells that product for $90 per unit. Cost information for the product is as follows: Direct Material $16 per Unit Direct Labor $26 per Unit Variable Overhead $5 per Unit Fixed Overhead $26,800 Selling expenses are $4 per unit and are all variable. Administrative expenses of $16,000 are all fixed. Grainger produced 4,000 units; sold 3,200; and had no beginning inventory. A. Compute net income under i. Absorption Costing $ ii. Variable Costing B. Which costing method provide higher net income? By how much? The absorption costing method provided more net income by $ 5,360

Grainger Company produces only one product and sells that product for $90 per unit. Cost information for the product is as follows: Direct Material $16 per Unit Direct Labor $26 per Unit Variable Overhead $5 per Unit Fixed Overhead $26,800 Selling expenses are $4 per unit and are all variable. Administrative expenses of $16,000 are all fixed. Grainger produced 4,000 units; sold 3,200; and had no beginning inventory. A. Compute net income under i. Absorption Costing $ ii. Variable Costing B. Which costing method provide higher net income? By how much? The absorption costing method provided more net income by $ 5,360

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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Grainger Company produces only one product and sells that product for $110 per unit. Cost information for the product is as follows: Direct Material $16 per Unit Direct Labor $26 per Unit Variable Overhead $6 per Unit Fixed Overhead $27,200 Selling expenses are $5 per unit and are all variable. Administrative expenses of $20,000 are all fixed. Grainger produced 4,000 units; sold 3,200; and had no beginning inventory. A. Compute net income under i. Absorption Costing $fill in the blank 1 ii. Variable Costing $fill in the blank 2 B. Which costing method provide higher net income? By how much? The method provided more net income by $fill in the blank 4 .
MIUPI companies produce lanyards (cord). The cost of making a unit of product is $ 1.00 for direct materials, $ 0.50 for indirect labor, $ 1.25 for variable indirect costs. Indirect fixed overhead costs total $ 100,000. Commissions to sellers are $ 0.20 per unit sold. Other variable administrative and sales costs total $ 0.05 per unit. Fixed selling and administrative expenses total $ 200,000. The company taxes its earnings at 40%. Each unit sells for $ 5.00. 100. Management is considering increasing the vendors total cost of salary by $ 2,000, there are 4 vendors and eliminating the commission. Determine the new breakeven point and select which is best for the company, commission to sellers
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Cc. 188.
Jax Incorporated reports the following data for its only product. The company had no beginning finished goods inventory and it uses absorption costing. Sales price Direct materials Direct labor Variable overhead Fixed overhead $ 56.60 per unit $ 9.60 per unit $ 7.10 per unit $ 11.60 per unit $ 910,800 per year 1. Compute gross profit assuming (a) 66,000 units are produced and 66,000 units are sold and (b) 92,000 units are produced and 66,000 units are sold. 2. By how much would the company's gross profit increase or decrease from producing 26,000 more units than it sells? Complete this question by entering your answers in the tabs below. es Required 1 Required 2 Compute gross profit assuming (a) 66,000 units are produced and 66,000 units are sold and (b) 92,000 units are produced and 66,000 units are sold. (a) 66,000 Units Produced and 66,000 (b) 92,000 Units Produced and 66,000 Units Sold Units Sold Sales $ 3,735,600 $ 5,207,200 Cost of goods sold 2,838,000 3,514,400 Gross profit $…
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