1. The value of Bruno's actual ending finished goods inventory on the absorption costing basis was 2. The value of Bruno's actual ending finished goods inventory on the variable costing basis was 4. Bruno's total costs expensed this year on the absorption costing basis were 5. Bruno Inc's actual manufacturing contribution margin for the year calculated on the variable costing basis was 6. The total variable cost expensed currently by Bruno on the variable costing basis was 7. The difference between Bruno's operating income calculated on the absorption costing basis and calculated
1. The value of Bruno's actual ending finished goods inventory on the absorption costing basis was 2. The value of Bruno's actual ending finished goods inventory on the variable costing basis was 4. Bruno's total costs expensed this year on the absorption costing basis were 5. Bruno Inc's actual manufacturing contribution margin for the year calculated on the variable costing basis was 6. The total variable cost expensed currently by Bruno on the variable costing basis was 7. The difference between Bruno's operating income calculated on the absorption costing basis and calculated
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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1. The value of Bruno's actual ending finished goods inventory on the absorption costing basis was
2. The value of Bruno's actual ending finished goods inventory on the variable costing basis was
4. Bruno's total costs expensed this year on the absorption costing basis were
5. Bruno Inc's actual manufacturing contribution margin for the year calculated on the variable costing basis was
6. The total variable cost expensed currently by Bruno on the variable costing basis was
7. The difference between Bruno's operating income calculated on the absorption costing basis and calculated on the variable costing is
Transcribed Image Text:Bruno Company employs an absorption costing system for internal reporting purposes; however, the
company is considering variable costing. Data regarding Bruno's planned and actual operations for the
calendar year are presented below.
Planned Activity Actual Activity
Beginning Finished Goods
35,000
35,000
inventory in units
Sales in units
140,000
125,000
Production in Units
140,000
130,000
The planned per unit cost figures shown in the next schedule were based on the estimated production and
sale of 140,000 units for the year. Bruno uses a predetermined manufacturing overhead rate for applying
manufacturing overhead to its product thus a combined manufacturing overhead rate of P 9.00 per unit was
employed for absorption costing purposes. Any over-or underapplied manufacturing overhead is closed to
the cost of goods sold account at the end of the reporting year.
Planned Costs
Per Unit
Total
Incurred Costs
Direct Materials
P 12.00
P1,680,000
P1,560,000
Direct Labor
9.00
1,260,000
1,170.000
Variable Manufacturing
4.00
560,000
520,000
Overhead
Fixed manufacturing Overhead 5.00
Variable Selling expenses
700,000
715,000
8.00
1,120,000
1,000,000
Fixed selling expenses
7.00
980,000
980,000
Variable administrative expenses 2.00
280,000
250,000
Fixed administrative expenses
3.00
420,000
425,000
Total
P 50.00
P7,000,000
P6,620,000
The beginning finished goods inventory for absorption costing purposes was valued at the previous year's
planned unit manufacturing cost. Which was the same as the current planned unit manufacturing cost. There
are no work in process inventories at either the beginning or the end of the year. The planned and actual unit
selling prine was R 70 per unit
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