4 part 2 ### Dowell Company Costing Analysis**Introduction:**Dowell Company produces a single product. The table below illustrates its income under variable costing for its first two years of operation.---**Variable Costing Income:**| | Year 1 | Year 2 ||---|--------|--------|| Income | $50,000 | $680,000 |---**Additional Information:**a. **Sales and Production Data:**| Units | Year 1 | Year 2 ||---|-------|-------|| Units Produced | 52,000 | 52,000 || Units Sold | 40,000 | 64,000 |b. **Product Cost Using Absorption Costing:**The company’s $33 per unit product cost (for both years) is detailed as follows:- **Direct Materials:** $6- **Direct Labor:** $9- **Variable Overhead:** $8- **Fixed Overhead:** $10 (calculated based on $500,000/50,000 units)**Total Product Cost Per Unit: $33**---**Task:**Prepare a statement to convert variable costing income to absorption costing income for both years.*(Note: Leave no cells blank and enter "0" where necessary.)***Income Conversion Table:**| **Dowell Company** | **Convert Variable Costing Income to Absorption Costing Income** ||---|---|---|| | Year 1 | Year 2 || **Variable Costing Income** | $50,000 | $680,000 || **Add: Fixed Overhead in Ending FG Inventory** | 115,440 | 0 || **Less: Fixed Overhead in Beginning FG Inventory** | 0 | (115,440) || **Absorption Costing Income** | 165,440 | 564,560 |---**Note:**The solution must ensure each computational field is completed correctly and that the inventory adjustments reflect the changes in fixed overhead per unit as inventory levels alter.

Introduction:- Under Absorption Costing accumulate all the manufacturing costs into the cost of a…

Required: Prepare a statement to convert variable costing income to absorption costing income for both years. (Leave no cells blank - be cer to enter "0" wherever required.) Answer is complete but not entirely correct. Dowell Company Convert Variable Costing Income to Absorption Costing Income Year 1 Variable costing income Add: Fixed overhead in ending FG inventory 50,000 $ 115,440 Year 2 680,000 0

Required: Prepare a statement to convert variable costing income to absorption costing income for both years. (Leave no cells blank - be cer to enter "0" wherever required.) Answer is complete but not entirely correct. Dowell Company Convert Variable Costing Income to Absorption Costing Income Year 1 Variable costing income Add: Fixed overhead in ending FG inventory 50,000 $ 115,440 Year 2 680,000 0

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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