6 Data Section: 7 8 Actual production in units 9 Sales in units 10 Sales price per unit 11 Variable manufacturing costs per unit 12 Variable selling costs per unit 13 Fixed manufacturing costs 14 Fixed selling expenses 100,000 80,000 $30 $14 $2 $630,000 $100,000 A 15 - 16 Answer Section: 17 Income statement: Absorption costing 18 19 Sales FORMULA1 20 Cost of goods sold: 21 Variable manufacturing costs 22 Fixed manufacturing costs FORMULA2 FORMULA3 23 24 Total goods available for sale 25 Less ending inventory FORMULA4 26 27 Cost of goods sold 28 29 Gross profit 30 Fixed selling expenses 31 Variable selling expenses FORMULA5 FORMULA6 32 33 Operating income 34 === ==== === 35 Income statement: Variable costing 36 37 Sales $2,400,000 38 Cost of goods sold: 39 Variable manufacturing costs 40 Less ending inventory FORMULA7 FORMULA8 41 42 Variable cost of goods sold 43 44 Manufacturing margin 45 Variable selling expenses FORMULA9 46 47 Contribution margin 48 Fixed manufacturing costs 49 Fixed selling expenses FORMULA10 $100,000 50 51 Operating income 52

6 Data Section: 7 8 Actual production in units 9 Sales in units 10 Sales price per unit 11 Variable manufacturing costs per unit 12 Variable selling costs per unit 13 Fixed manufacturing costs 14 Fixed selling expenses 100,000 80,000 $30 $14 $2 $630,000 $100,000 A 15 - 16 Answer Section: 17 Income statement: Absorption costing 18 19 Sales FORMULA1 20 Cost of goods sold: 21 Variable manufacturing costs 22 Fixed manufacturing costs FORMULA2 FORMULA3 23 24 Total goods available for sale 25 Less ending inventory FORMULA4 26 27 Cost of goods sold 28 29 Gross profit 30 Fixed selling expenses 31 Variable selling expenses FORMULA5 FORMULA6 32 33 Operating income 34 === ==== === 35 Income statement: Variable costing 36 37 Sales $2,400,000 38 Cost of goods sold: 39 Variable manufacturing costs 40 Less ending inventory FORMULA7 FORMULA8 41 42 Variable cost of goods sold 43 44 Manufacturing margin 45 Variable selling expenses FORMULA9 46 47 Contribution margin 48 Fixed manufacturing costs 49 Fixed selling expenses FORMULA10 $100,000 50 51 Operating income 52

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Description: Sales Variable manufacturing costFixed manufacturing costLess ending inventoryFixed selling expenses Variable Selling Expenses Variable manufacturing cost Less ending inventory Variable selling expenses Fixed manufacturing cost From the information g

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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Concept explainers

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.

Topic Video

Question

100%

Sales
Variable manufacturing cost
Fixed manufacturing cost
Less ending inventory
Fixed selling expenses
Variable Selling Expenses
Variable manufacturing cost
Less ending inventory
Variable selling expenses
Fixed manufacturing cost

From the information given in the sheet determine 1-10.

6 Data Section:
7
8 Actual production in units
9 Sales in units
10 Sales price per unit
11 Variable manufacturing costs per unit
12 Variable selling costs per unit
13 Fixed manufacturing costs
14 Fixed selling expenses
100,000
80,000
$30
$14
$2
$630,000
$100,000
A
15 -
16 Answer Section:
17 Income statement: Absorption costing
18
19 Sales
FORMULA1
20 Cost of goods sold:
21 Variable manufacturing costs
22 Fixed manufacturing costs
FORMULA2
FORMULA3
23
24 Total goods available for sale
25 Less ending inventory
FORMULA4
26
27
Cost of goods sold
28
29 Gross profit
30 Fixed selling expenses
31 Variable selling expenses
FORMULA5
FORMULA6
32
33 Operating income
34
=== ==== ===
35 Income statement: Variable costing
36
37 Sales
$2,400,000
38 Cost of goods sold:
39 Variable manufacturing costs
40 Less ending inventory
FORMULA7
FORMULA8
41
42
Variable cost of goods sold
43
44 Manufacturing margin
45 Variable selling expenses
FORMULA9
46
47 Contribution margin
48 Fixed manufacturing costs
49 Fixed selling expenses
FORMULA10
$100,000
50
51 Operating income
52

Definition Definition Total cost of procuring or producing a product or the cost that an individual or business owner undertakes for the manufacturing of goods.

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