7. Comparison of direct costing to absorption costing. Hubert Corporation's November income statement, based on direct costing, is as follows: Sales (100,000 units @ $24).. Variable cost of goods sold (100.000 units @ $12). Contribution margin... Less fixed expenses: $2,400,000 1,200,000 $1,200.000 Factory overhead.. Marketing and administrative. Operating income.. S600,000 400,000 1,000,000 $ 200,000 Normal capacity for November is 150,000 units, with 145,000 units produced in November. Required: (1) Prepare the November income statement on an absorption costing basis, with applied factory overhead based on normal capacity and any over- or underapplied factory overhead closed to Cost of Goods Sold. (2) Reconcile and explain the difference between the direct costing and the absorption costing operating income figures. (3) Expiain :he features associated with direct costing income measurement that should be useful to management. (ICMA adapted)

7. Comparison of direct costing to absorption costing. Hubert Corporation's November income statement, based on direct costing, is as follows: Sales (100,000 units @ $24).. Variable cost of goods sold (100.000 units @ $12). Contribution margin... Less fixed expenses: $2,400,000 1,200,000 $1,200.000 Factory overhead.. Marketing and administrative. Operating income.. S600,000 400,000 1,000,000 $ 200,000 Normal capacity for November is 150,000 units, with 145,000 units produced in November. Required: (1) Prepare the November income statement on an absorption costing basis, with applied factory overhead based on normal capacity and any over- or underapplied factory overhead closed to Cost of Goods Sold. (2) Reconcile and explain the difference between the direct costing and the absorption costing operating income figures. (3) Expiain :he features associated with direct costing income measurement that should be useful to management. (ICMA adapted)

Name: on normal capacity and assuming factory overhead variances are not(3)
Uploaded: 2024-03-20T06:32:49.000Z
Channel: Bartleby
Description: on normal capacity and assuming factory overhead variances are not(3) Absorption costing, using actual prime cost and applied factory overhead, based7. Comparison of direct costing to absorption costing. Hubert Corporation's(CGAAC adapted)prorated.7

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

XYZ, Inc. reports the following information for November: Sales Revenue $800,000 Variable Cost of Goods Sold 110,000 Fixed Cost of Goods Sold 45,000 Variable Selling and Administrative Costs 100,000 Fixed Selling and Administrative Costs 70,000 Calculate the gross profit for November using absorption (traditional) costing. Question 18Select one: A. $ 730,000 B. $690,000 C. $700,000 D. $645,000
Please help me fix this! Thanks!
Please give me correct answer
How do I prepare an Income Statement for March 2022 by using the absorption costing method? Other info: The variable manufacturing cost per unit and total manufacturing cost per unit of the finished goods on 01 March 2022 was R21.60 and R26.20 respectively.
On November 30, the end of the first month of operations, Weatherford Company prepared the following income statement, based on the absorption costing concept: Weatherford Company Absorption Costing Income Statement For the Month Ended November 30 Sales (6,100 units) Cost of goods sold: Cost of goods manufactured (7,000 units) Inventory, November 30 (1,000 units) Total cost of goods sold Gross profit $161,000 Sales Variable cost of goods sold: Variable cost of goods manufactured Inventory, November 30 (23,000) $201,300 138,000 $63,300 Selling and administrative expenses 35,910 Income from operations $27,390 Assume the fixed manufacturing costs were $38,640 and the fixed selling and administrative expenses were $17,590 Prepare an income statement according to the variable costing concept. Round all final answers to whole dollars. Weatherford Company Variable Costing Income Statement For the Month Ended November 30 201,300
Give true answer
Hh2.
Absorption Costing Income Statement On October 31, the end of the first month of operations, Maryville Equipment Company prepared the following income statement, based on the variable costing concept: Maryville Equipment Company Variable Costing Income Statement For the Month Ended October 31 Sales (220,000 units) Variable cost of goods sold: Variable cost of goods manufactured Inventory, October 31 (45,000 units) Total variable cost of goods sold Manufacturing margin Variable selling and administrative expenses Contribution margin Fixed costs: Fixed manufacturing costs Fixed selling and administrative expenses Total fixed costs Operating income Line Item Description Amount Amount $6,360,000 (1,080,000) Cost of goods sold: $530,000 100,000 $7,920,000 (5,280,000) $2,640,000 (330,000) $2,310,000 Prepare an income statement under absorption costing. Maryville Equipment Company Absorption Costing Income Statement For the Month Ended October 31 (630,000) $1,680,000
5
Columbia Corporation produces a single product. The company's variable costing income statement for November appears below: Columbia Corporation Income Statement For the Month ended November 30 Sales ($20 per unit) Variable expenses: Variable cost of goods sold Variable selling expense Total variable expenses Contribution margin Fixed expenses: Manufacturing Selling and administrative Total fixed expenses Net operating income $ 802,000 521,300 80,200 601,500 200,500 142,880 35,720 178,600 $ 21,900 During November, 35,720 units were manufactured and 8,340 units were in beginning inventory. Variable production costs per unit, total fixed manufacturing expenses, and the number of units produced were the same in prior months. Under absorption costing, for November the company would report a: Submit
V. Prepare a CONTRIBUTION MARGIN (also known as variable costing) income statement given a traditional (also known as absorption costing) income statement Bruno Industries manufactures and sells a single product. The controller has prepared the following income statement for the most recent year: B C D 1 2 3 Bruno Industries Traditional Income Statement (Absorption Costing) For the Year Ended December 31 4 5 Sales revenue 6 Less: Cost of goods sold 7 Gross profit 8 Less: Operating expenses 9 Operating income $ 406,000 329,000 $ 77,000 73,000 $ 4,000 10 The company produced 8,000 units and sold 7,000 units during the year ending December 31. Fixed manufacturing overhead (MOH) for the year was $152,000, while fixed operating expenses were $62,000. The company had no beginning inventory. Requirements 1. Will the company's operating income under variable costing be higher, lower, or the same as its operating income under absorption costing? Why? 2. Prepare a variable costing income…
Provide correct solution