High Country, Inc., produces and sells many recreational products. The company has just opened a new plant to produce a foldingcamp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month of theplant's operation:Beginning inventoryUnits producedUnits soldSelling price per unitSelling and administrative expenses:Variable per unitFixed (per month)Manufacturing costs:Direct materials cost per unitDirect labor cost per unitVariable manufacturing overhead cost per unitFixed manufacturing overhead cost (per month)2. Assume that the company uses variable costing.a. Determine the unit product cost.b. Prepare a contribution format income statement for May.Req 1AManagement is anxious to assess the profitability of the new camp cot during the month of May.Required:1. Assume that the company uses absorption costing.a. Determine the unit product cost.b. Prepare an income statement for May.Req 1BReq ZAComplete this question by entering your answers in the table below.Req 28039,00034,00083$$4$ 563,000$$1574$ 741,000< Req 1ADetermine the unit product cost. Assume that the company uses absorption costing.Unit product costReq 1B >||

Under the absorption costing the cost of the product cost is the all the variable costs that are…

1. Assume that the company uses absorption costing. a. Determine the unit product cost. b. Prepare an income statement for May. 2. Assume that the company uses variable costing. a. Determine the unit product cost. b. Prepare a contribution format income statement for May.

1. Assume that the company uses absorption costing. a. Determine the unit product cost. b. Prepare an income statement for May. 2. Assume that the company uses variable costing. a. Determine the unit product cost. b. Prepare a contribution format income statement for May.

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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Income Statements under Absorption Costing and Variable Costing Fresno Industries Inc. manufactures and sells high-quality camping tents. The company began operations on January 1 and operated at 100% of capacity (70,400 units) during the first month, creating an ending inventory of 6,400 units. During February, the company produced 64,000 units during the month but sold 70,400 units at $90 per unit. The February manufacturing costs and selling and administrative expenses were as follows: Manufacturing costs in February 1 beginning inventory: Variable Fixed Total Manufacturing costs in February: Variable Fixed Total Selling and administrative expenses in February: Variable Fixed Total Number of Units Cost of goods sold: 6,400 $36.00 6,400 14.00 64,000 64,000 Unit Cost 70,400 70,400 Total Cost $230,400 89,600 $50.00 $320,000 $36.00 $2,304,000 15.40 985,600 $51.40 $3,289,600 $18.20 $1,281,280 7.00 492,800 $25.20 $1,774,080 a. Prepare an income statement according to the absorption…
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b. Prepare a contribution format income statement for May.
The Dorilane Company produces a set of wood patio furniture consisting of a table and four chairs. The company has enough customer demand to justify producing its full capacity of 3,800 sets per year. Annual cost data at full capacity follow: Direct labor Advertising Factory supervision Property taxes, factory building Sales commissions Insurance, factory Depreciation, administrative office equipment Lease cost, factory equipment Indirect materials, factory Depreciation, factory building Administrative office supplies (billing) Administrative office salaries Direct materials used (wood, bolts, etc.) Utilities, factory $ 89,000 $ 103,000 $70,000 $ 23,000 $ 65,000 $ 6,000 $ 2,000 $ 17,000 $ 18,000 $ 106,000 $ 5,000 $ 111,000 $ 426,000 $ 46,000 Required: 1. Enter the dollar amount of each cost item under the appropriate headings. Note that each cost item is classified in two ways: first, as variable or fixed with respect to the number of units produced and sold; and second, as a selling…
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