Problem 6-22 (Algo) Variable Costing Income Statements; Income Reconciliation [LO6-1, L06-2, LO6-3] 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 $4 10 2 2 $ 18 $ 126,000 172,000 $ 298,000 The product sells for $50 per unit. Production and sales data for July and August, the first two months of operations, follow:

Problem 6-22 (Algo) Variable Costing Income Statements; Income Reconciliation [LO6-1, L06-2, LO6-3] 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 $4 10 2 2 $ 18 $ 126,000 172,000 $ 298,000 The product sells for $50 per unit. Production and sales data for July and August, the first two months of operations, follow:

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter7: Variable Costing For Management analysis

Section: Chapter Questions

Problem 2BE

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Grand Canyon Manufacturing Inc. produces and sells a product with a price of 100 per unit. The following cost data have been prepared for its estimated upper and lower limits of activity: Overhead: Selling and administrative expenses: Required: 1. Classify each cost element as either variable, fixed, or semi-variable. (Hint: Recall that variable expenses must go up in direct proportion to changes in the volume of activity.) 2. Calculate the break-even point in units and dollars. (Hint: First use the high-low method illustrated in Chapter 4 to separate costs into their fixed and variable components.) 3. Prepare a break-even chart. 4. Prepare a contribution income statement, similar in format to the statement appearing on page 540, assuming sales of 5,000 units. 5. Recompute the break-even point in units, assuming that variable costs increase by 20% and fixed costs are reduced by 50,000.
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es Exercise 6-9 (Algo) Variable and Absorption Costing Unit Product Costs and Income Statements [LO6-1, LO6-2, LO6-3] Walsh Company manufactures and sells one product. The following information pertains to each of the company's first two years of 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 expenses $26 $ 14 $5 $4 2. Assume the company uses absorption costing: a. Compute the unit product cost for Year 1 and Year 2. $ 240,000 $ 100,000 During its first year of operations, Walsh produced 50,000 units and sold 40,000 units. During its second year of operations, it produced 40,000 units and sold 50,000 units. The selling price of the company's product is $54 per unit. Required: 1. Assume the company uses variable costing: a. Compute the unit product cost for Year 1 and Year 2. b. Prepare an income…
! Required information Case 4-29 (Algo) Variable and Absorption Costing Unit Product Costs and Income Statements [LO4-1, LO4-2] [The following information applies to the questions displayed below.] O'Brien Company manufactures and sells one product. The following information pertains to each of the company's first three years of 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 expenses $ 570,000 $ 110,000 During its first year of operations, O'Brien produced 100,000 units and sold 74,000 units. During its second year of operations, it produced 76,000 units and sold 97,000 units. In its third year, O'Brien produced 81,000 units and sold 76,000 units. The selling price of the company's product is $77 per unit. Case 4-29 Part-3 (Algo) 3. Assume the company uses absorption costing and a FIFO inventory flow…
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