Managerial Accounting
3rd Edition
ISBN: 9780077826482
Author: Stacey M Whitecotton Associate Professor, Robert Libby, Fred Phillips Associate Professor
Publisher: McGraw-Hill Education
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Chapter 5, Problem 6.4GBP
To determine
Absorption costing:
It is a costing in which the company includes all the cost including the fixed costing in order to determine the cost of a product. It is the costing method that a company is required to use for calculating and filing its taxes.
Variable costing:
It is the costing which includes all type of variable cost. It is an accounting method used to allocate production to its cost and it is done during the period.
To prepare:
The Absorption Costing Income Statement
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Milano Pizza is a small neighborhood pizzeria that has a small area for in-store dining as well as offering take-out and free
home delivery services. The pizzeria's owner has determined that the shop has two major cost drivers-the number of pizzas
sold and the number of deliveries made.
The pizzeria's cost formulas appear below:
Fixed
Cost per
Month
Pizza ingredients
Kitchen staff
Utilities
Delivery person
Delivery vehicle
Equipment depreciation
Rent
Miscellaneous
$ 6,210
$ 760
Pizzas
Deliveries
Revenue
Pizza ingredients
Kitchen staff
Utilities
Delivery person
Delivery vehicle
Equipment depreciation
Rent
Miscellaneous
$ 780
$ 520
$ 2,170
$ 880
Actual
Results
2,110
190
$ 30,240
$ 9,910
$ 6,150
$ 960
$ 494
1,016
$ 520
$ 2,170
$ 880
Cost per
Pizza
$ 4.80
$ 0.80
$
$ 0.20
In November, the pizzeria budgeted for 2,010 pizzas at an average selling price of $14 per pizza and for 210 deliveries.
Data concerning the pizzeria's actual results in November appear below:
cost per
Delivery
$ 2.60
$…
Milano Pizza is a small neighborhood pizzeria that has a small area for in-store dining as well as offering take-out and free home
delivery services. The pizzeria's owner has determined that the shop has two major cost drivers-the number of pizzas sold and the
number of deliveries made.
The pizzeria's cost formulas appear below:
Fixed Cost
per Month
Pizza ingredients
Kitchen staff
Utilities
Delivery person
Delivery vehicle
Equipment depreciation
Rent
Miscellaneous
4
Pizzas
Deliveries
Revenue
Pizza ingredients
Kitchen staff
Utilities
Delivery person
Delivery vehicle.
Equipment depreciation
Rent
Miscellaneous
Pizzas
Deliveries
Revenue
Expenses:
Pizza ingredients
Kitchen staff
Utilities
Delivery person
Delivery vehicle
Equipment depreciation
Rent
$ 6,250
$ 780
$ 0.10
In November, the pizzeria budgeted for 2,070 pizzas at an average selling price of $16 per pizza and for 230 deliveries.
Data concerning the pizzeria's actual results in November were as follows:
Miscellaneous
Total expense…
Milano Pizza is a small neighborhood pizzeria that has a small area for in-store dining as well as offering take-out and free home
delivery services. The pizzeria's owner has determined that the shop has two major cost drivers-the number of pizzas sold and the
number of deliveries made.
The pizzeria's cost formulas appear below:
Fixed Cost
per Month
Pizza ingredients
Kitchen staff
Utilities
Delivery person
Delivery vehicle.
Equipment depreciation
Rent
Miscellaneous
Pizzas
Deliveries
Revenue
Pizza ingredients.
Excee
Kitchen staff
n+ili+
Utilities
Delis
Delivery person
Delivery vehicle
Equipment depreciation.
Rent
Miscellaneous
$ 6,090
$ 700
Pizzas
Deliveries
Revenue
Expenses:
$ 720
$ 472
Pizza ingredients
Kitchen staff
$ 2,050
$ 820
In November, the pizzeria budgeted for 1,830 pizzas at an average selling price of $16 per pizza and for 230 deliveries.
Data concerning the pizzeria's actual results in November were as follows:
Actual
Results
1,930
210
520
$ 31,520
930
$ 8,830
$ 6,030
$930…
Chapter 5 Solutions
Managerial Accounting
Ch. 5 - Define each of the following terms variable cost,...Ch. 5 - Prob. 2QCh. 5 - Prob. 3QCh. 5 - Prob. 4QCh. 5 - Prob. 5QCh. 5 - Describe the three methods used to estimate cost...Ch. 5 - Prob. 7QCh. 5 - Prob. 8QCh. 5 - Prob. 9QCh. 5 - Prob. 10Q
Ch. 5 - Prob. 11QCh. 5 - Prob. 12QCh. 5 - Prob. 13QCh. 5 - Prob. 14QCh. 5 - Which of the following increases when activity...Ch. 5 - Prob. 2MCCh. 5 - Prob. 3MCCh. 5 - Consider the following information for a local...Ch. 5 - Prob. 5MCCh. 5 - Prob. 6MCCh. 5 - Prob. 7MCCh. 5 - Prob. 8MCCh. 5 - Prob. 9MCCh. 5 - Hathaway Corp, manufactures garden hoses. Last...Ch. 5 - Identifying Cost Behavior Heather Oak is trying to...Ch. 5 - Prob. 2MECh. 5 - Defining Cost Behavior Match each of the following...Ch. 5 - Prob. 4MECh. 5 - Defining Terms for the High-Low Method Indicate...Ch. 5 - Prob. 6MECh. 5 - Prob. 7MECh. 5 - Prob. 8MECh. 5 - Prob. 9MECh. 5 - Prob. 10MECh. 5 - Prob. 11MECh. 5 - Prob. 12MECh. 5 - Prob. 13MECh. 5 - Prob. 14MECh. 5 - Prob. 15MECh. 5 - Prob. 16MECh. 5 - Compare full absorption costing to variable...Ch. 5 - Identifying Cost Behavior Patterns Steve...Ch. 5 - Prob. 2ECh. 5 - Prob. 3ECh. 5 - Prob. 4ECh. 5 - Estimating Cost Behavior Using High-Low Method...Ch. 5 - Prob. 6ECh. 5 - Prob. 7ECh. 5 - Prob. 8ECh. 5 - Prob. 9ECh. 5 - Estimating Cost Behavior Using Scattergraph and...Ch. 5 - Estimating Cost Behavior Using Least-Squares...Ch. 5 - Comparing High-Low Method and Least-Squares...Ch. 5 - Preparing Contribution Margin Income Statement...Ch. 5 - Determining Cost Behavior, Preparing Contribution...Ch. 5 - Prob. 15ECh. 5 - Prob. 16ECh. 5 - Prob. 17ECh. 5 - Prob. 18ECh. 5 - Comparing Full Absorption Costing and Variable...Ch. 5 - Estimating Cost Behavior Using Least-Squares...Ch. 5 - Prob. 1.1GAPCh. 5 - Prob. 1.2GAPCh. 5 - Prob. 1.3GAPCh. 5 - Prob. 1.4GAPCh. 5 - Prob. 1.5GAPCh. 5 - Prob. 1.6GAPCh. 5 - Prob. 2.1GAPCh. 5 - Prob. 2.2GAPCh. 5 - Prob. 2.3GAPCh. 5 - Prob. 2.4GAPCh. 5 - Prob. 2.5GAPCh. 5 - Prob. 2.6GAPCh. 5 - Prob. 2.7GAPCh. 5 - Prob. 3.1GAPCh. 5 - Prob. 3.2GAPCh. 5 - Prob. 3.3GAPCh. 5 - Prob. 3.4GAPCh. 5 - Prob. 3.5GAPCh. 5 - Prob. 4.1GAPCh. 5 - Prob. 4.2GAPCh. 5 - Prob. 4.3GAPCh. 5 - Comparing Full Absorption and Variable Costing...Ch. 5 - Comparing Full Absorption and Variable Costing...Ch. 5 - Prob. 5.3GAPCh. 5 - Prob. 6.1GAPCh. 5 - Prob. 6.2GAPCh. 5 - Prob. 6.3GAPCh. 5 - Prob. 6.4GAPCh. 5 - Prob. 6.5GAPCh. 5 - Prob. 6.6GAPCh. 5 - Prob. 1.1GBPCh. 5 - Prob. 1.2GBPCh. 5 - Prob. 1.3GBPCh. 5 - Prob. 1.4GBPCh. 5 - Estimating Cost Behavior Using Scattergraph,...Ch. 5 - Prob. 1.6GBPCh. 5 - Prob. 2.1GBPCh. 5 - Estimating Cost Behavior Using Scattergraph,...Ch. 5 - Prob. 2.3GBPCh. 5 - Prob. 2.4GBPCh. 5 - Prob. 2.5GBPCh. 5 - Prob. 2.6GBPCh. 5 - Prob. 2.7GBPCh. 5 - Prob. 3.1GBPCh. 5 - Prob. 3.2GBPCh. 5 - Prob. 3.3GBPCh. 5 - Prob. 3.4GBPCh. 5 - Prob. 3.5GBPCh. 5 - Prob. 4.1GBPCh. 5 - Prob. 4.2GBPCh. 5 - Prob. 4.3GBPCh. 5 - Prob. 5.1GBPCh. 5 - Prob. 5.2GBPCh. 5 - Prob. 5.3GBPCh. 5 - Prob. 6.1GBPCh. 5 - Prob. 6.2GBPCh. 5 - Prob. 6.3GBPCh. 5 - Prob. 6.4GBPCh. 5 - Prob. 6.5GBPCh. 5 - Prob. 6.6GBP
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