Homework Help is Here – Start Your Trial Now!
Business
Accounting
7. Profit and reconciliation of profit. Maggie has just obtained a patent on a small electronic device and organized Maggie Products, Ic., in order to produce and sell the device. During the first month of operations, the device was very well received on the market and a statement of profit or loss shown below was prepared. The President was discouraged over the loss shown on the profit or loss statement. Maggie Products, Inc. Statement of ProfIt or Loss First Month P 200,000 Sales (40,000 units). Less variable expenses: P 80,000 Cost of goods sold (*) Selling and administrative Contribution margin Less fixed expeńses: 30,000 110.000 90,000 Manufacturing overhead Selling and administrative Net loss 75,000 20.000 95,000 P (5.000) (* consists of direct materials, direct labor and variable overhead.) Other datą: Ünits produced Units sold Variable costs per unit: Direct materials 50,000 40,000 P 1.00 0.80 Direct labor 0.20 Manufacturing overhead Selling and administrative expenses 0.90

7. Profit and reconciliation of profit. Maggie has just obtained a patent on a small electronic device and organized Maggie Products, Ic., in order to produce and sell the device. During the first month of operations, the device was very well received on the market and a statement of profit or loss shown below was prepared. The President was discouraged over the loss shown on the profit or loss statement. Maggie Products, Inc. Statement of ProfIt or Loss First Month P 200,000 Sales (40,000 units). Less variable expenses: P 80,000 Cost of goods sold (*) Selling and administrative Contribution margin Less fixed expeńses: 30,000 110.000 90,000 Manufacturing overhead Selling and administrative Net loss 75,000 20.000 95,000 P (5.000) (* consists of direct materials, direct labor and variable overhead.) Other datą: Ünits produced Units sold Variable costs per unit: Direct materials 50,000 40,000 P 1.00 0.80 Direct labor 0.20 Manufacturing overhead Selling and administrative expenses 0.90

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question

#7

Please show your complete solution and answer. Thank you!

Profit and reconciliation of profit. Maggie has just obtained a patent on a small electronic device and organized Maggie Products, Inc., in order to produce and sell the device. During the first month of operations, the device was very well received on the market and a statement of profit or loss shown below was prepared. The President was discouraged over the loss shown on the profit or loss statement. 7. Maggie Products, Inc. Statement of ProfIt or Loss First Month P 200,000 Sales (40,000 units). Less variable expenses: Cost of goods sold (*) Selling and administrative Contribution margin Less fixed expeńses: Manufacturing overhead Selling and administrative Net loss P 80,000 30,000 110,000 90,000 75,000 20,000 95,000 P (5.000) (* consists of direct materials, direct labor and variable overhead.) Other datą: Ünits produced Units sold Variable costs per unit: 50,000 40,000 Direct materials P 1.00 0.80 Direct labor 0.20 Manufacturing overhead Selling and administrative expenses 0.90 Required: Calculate the unit product cost under absorption costing. Calculate the profit (loss) under absorption costing. Reconcile the difference in profit under absorption costing and variable costing. 1. 2. 3
Transcribed Image Text:Profit and reconciliation of profit. Maggie has just obtained a patent on a small electronic device and organized Maggie Products, Inc., in order to produce and sell the device. During the first month of operations, the device was very well received on the market and a statement of profit or loss shown below was prepared. The President was discouraged over the loss shown on the profit or loss statement. 7. Maggie Products, Inc. Statement of ProfIt or Loss First Month P 200,000 Sales (40,000 units). Less variable expenses: Cost of goods sold (*) Selling and administrative Contribution margin Less fixed expeńses: Manufacturing overhead Selling and administrative Net loss P 80,000 30,000 110,000 90,000 75,000 20,000 95,000 P (5.000) (* consists of direct materials, direct labor and variable overhead.) Other datą: Ünits produced Units sold Variable costs per unit: 50,000 40,000 Direct materials P 1.00 0.80 Direct labor 0.20 Manufacturing overhead Selling and administrative expenses 0.90 Required: Calculate the unit product cost under absorption costing. Calculate the profit (loss) under absorption costing. Reconcile the difference in profit under absorption costing and variable costing. 1. 2. 3
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 4 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Money Management and Achieving Financial Goals
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS