operations:Variable costs per unit:Manufacturing:Direct materialsDirect laborRequired:1. Assume that the company uses absorption costing:a. Compute the unit product cost.b. Prepare an income statement for the year.$ 10$4$1$1Variable manufacturing overheadVariable selling and administrativeFixed costs per year:Fixed manufacturing overhead$ 340,000Fixed selling and administrative.$ 250,000During the year, the company produced 34,000 units and sold 16,000 units. The selling price of the company's product is $54 per unit.2. Assume that the company uses variable costing:a. Compute the unit product cost.b. Prepare an income statement for the year.Return to questAnswer is not complete. SalesVariable expenses:Lynch CompanyVariable Costing Income StatementVariable cost of goods soldBeginning merchandise inventoryVariable cost of goods soldFixed manufacturing overheadFixed manufacturing overheadNet operating incomex$ 510,000 X270,000 X240,000340,000590,000 X$uses$ 864,0001,020,000(156,000)930,000(1,086,000)able

Absorption costing: In the absorption costing, product cost includes direct materials,direct labor…

operations: Variable costs per unit: Manufacturing: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative Required: 1. Assume that the company uses absorption costing: a. Compute the unit product cost. b. Prepare an income statement for the year. 2. Assume that the company uses variable costing: $ 10 $4 $1 $1 $ 340,000 $ 250,000 During the year, the company produced 34,000 units and sold 16,000 units. The selling price of the company's product is $54 per unit. a. Compute the unit product cost. b. Prepare an income statement for the year. Return to ques

operations: Variable costs per unit: Manufacturing: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative Required: 1. Assume that the company uses absorption costing: a. Compute the unit product cost. b. Prepare an income statement for the year. 2. Assume that the company uses variable costing: $ 10 $4 $1 $1 $ 340,000 $ 250,000 During the year, the company produced 34,000 units and sold 16,000 units. The selling price of the company's product is $54 per unit. a. Compute the unit product cost. b. Prepare an income statement for the year. Return to ques

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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During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales (@$60 per unit) Cost of goods sold (@ $41 per unit) Gross margin Selling and administrative expenses* Net operating income * $3 per unit variable; $246,000 fixed each year. The company's $41 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($378,000 21,000 units) Absorption costing unit product cost $ 7 12 4 18 $ 41 Production and cost data for the first two years of operations are: Year 1 Year 2 Units produced Units sold 21,000 16,000 21,000 26,000 Year 1 $ 960,000 656,000 Year 2 $ 1,560,000 1,066,000 304,000 294,000 $ 10,000 494,000 324,000 $ 170,000 Required: 1. Using variable costing, what is the unit product cost for both years? 2. What is the variable costing net operating Income in Year 1 and In Year 2? 3. Reconcile the absorption costing and the variable costing net…
Required information [The following information applies to the questions displayed below.] Barnes Company reports the following for its product for its first year of operations. $30 per unit $20 per unit $ 11 per unit 60,000 per year $3 per unit $ 22,000 per year $ Direct materials Direct labor Variable overhead Fixed overhead Variable selling and administrative expenses Fixed selling and administrative expenses The company sells its product for $150 per unit. Compute contribution margin using variable costing assuming the company (a) produces and sells 2,400 units and (b) produces 3,000 units and sells 2,400 units. X Answer is complete but not entirely correct. Contribution margin using variable costing Sales Variable expenses Direct materials Direct labor Variable overhead Contribution margin (a) 2,400 Units Produced and 2,400 Units Sold ✔ $ X X X 360,000 $ 72,000 48,000 X 26,400 X 213,600 $ (b) 3,000 Units Produced and 2,400 Units Sold 360,000✔ 90,000 X 60,000 X 33,000 X 147,000
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Question 1: The following information relating to production and mixed costs are extracted from the book of a manufacturing fırm: Months Production (Units) Mixed costs January 6,800 $31,580 February 6,400 $30,420 March 7,200 $32,740 April 8,000 $35,060 May 6,600 $31,000 June 7,000 $32,160 Requirements: 1. Using high and low method, estimate the variable cost per unit and the fixed costs elements from the above information 2. Express the variable and fixed costs in the form Y=a+bx
Trio Company reports the following information for its first year of operations. Direct materials $ 13 per unit Direct labor $ 17 per unit Variable overhead $ 7 per unit Fixed overhead $ 220,950 per year Units produced 24,550 units Units sold 18,000 units Ending finished goods inventory 6,550 units Assume instead that Trio Company uses variable costing.1. Compute the product cost per unit using variable costing.2. Determine the cost of ending finished goods inventory using variable costing.3. Determine the cost of goods sold using variable costing.
Absorption and Marginal Costing The Dorset Corporation produces and sells a single product. The following data refer to the year just completed: Beginning inventory 0 Units produced 9,000 Units sold 7,000 Selling price per unit $ 47 Selling and administrative expenses: Variable per unit $ 4 Fixed per year $ 58,000 Manufacturing costs: Direct materials cost per unit $ 10 Direct labor cost per unit $ 6 Variable manufacturing overhead cost per unit $ 5 Fixed manufacturing overhead per year $ 90,000 Assume that direct labor is a variable cost. Required: Prepare an income statement for the year using absorption costing Prepare an income statement for the year using variable costing Reconcile the absorption costing and variable costing net operating income figures
1. Providence Corporation produces a single product and has the following cost structure: Number of units produced each year Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative expense Fixed costs: Fixed manufacturing overhead Fixed selling and administrative expense lanolevil subivibr The unit product cost under variable costing is: 7,000 mos i h $78 $89 $6 $3 $532,000 $574,000
What was Ether Corporation's net operating income for the year using variable costing? P181,000 P281,000 P271,000 P371,000
Trio Company reports the following information for its first year of operations. Direct materials $ 18 per unit Direct labor $ 19 per unit Variable overhead $ 7 per unit Fixed overhead $ 221,650 per year Units produced 20,150 units Units sold 15,500 units Ending finished goods inventory 4,650 units Assume instead that Trio Company uses variable costing.1. Compute the product cost per unit using variable costing.2. Determine the cost of ending finished goods inventory using variable costing.3. Determine the cost of goods sold using variable costing.
Question: ABC Company produces a single product and has the following cost structure: Number of units produced each year Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead 3,000 $77 $41 $3 Variable selling and administrative expenses $5 Fixed costs per year: Fixed manufacturing overhead $36,000 Fixed selling and administrative expenses $249,000 Required: Compute the per unit product cost under absorption costing and variable costing. If ABC company produced 1,000 more units than it sold during the period, which method would produce the highest net income and by how much?
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