(a) Based on absorption costing, what was the company's operating income for the year?Company's operating income$(b) Based on variable costing, what was the company's operating income for the year?Company's operating income$(c) Assume that in the following year the company produced 2,450 trees and sold 2,600. Based on absorption costing, what was theoperating income for that year? Based on variable costing, what was the operating income for that year?Absorption CostingVariable CostingOperating income%24%24 Davis & Miller Industries makes artificial Christmas trees. The unit costs for producing a tree are:Direct materials$ 23Direct labor$ 14Variable overhead$ 16Fixed overhead$3The company also incurs $ 1 per tree in variable selling and administrative costs and $ 3,400 in fixed marketing costs.At the beginning of the year, the company had 870 trees in the beginning Finished Goods Inventory. The company produced 2,450trees during the year. Sales totaled 1,400 trees at a price of $ 101 per tree.

The question is based on the concept of Cost Accounting.

Answered: (a) Based on absorption costing, what…

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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Compute for the net operating income under variable costing for year 2
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The level of inventory of a manufactured product has increased by 7,534 units during a period. The following data are also available: Variable Fixed Unit manufacturing costs of the period $12 $7 Unit operating expenses of the period $2 $1 What would be the effect on income from operations if variable costing is used rather than absorption costing? a.$60,272 decrease b.$52,738 decrease c.$52,738 increase d.$60,272 increase
4) Wayne Manufacturing Company had the following information for the 2021. Selling price Direct materials cost per unit Indirect materials cost per unit Direct manufacturing labor per unit Indirect manufacturing labor cost per unit Salespersons' company vehicle costs per unit Annual property taxes on manufacturing plant building Annual Depreciation of manufacturing equipment Annual Depreciation of office equipment Miscellaneous plant overhead per unit Plant utilities per unit General office expenses per unit Annual Marketing costs Tax rate Calculate the following: a- Contribution margin per unit $30 4 3.20 4.8 2 1.65 28,000 264,000 118,000 1.35 .92 1.08 e- f- 30,000 30% b- Contribution margin percentage C- How many units does Wayne Company have to sell to break even? d- How many units does Wayne Company have to sell to make operating income of $55,000? How many units does Wayne Company have to sell to make operating income of $46,200? Calculate the operating leverage when expected sale…
Please answer all the subparts 1,2,3,4,5.if answered in 50mins ,it would be appreciable.surely will upvote.
The level of inventory of a manufactured product has increased by 7,949 units during a period. The following data are also available: Variable Fixed Unit manufacturing costs of the period $12.00 $5.00 Unit operating expenses of the period 4.00 4.00 The effect on operating income if variable costing is used rather than absorption costing would be a(n) a.$71,541 decrease b.$39,745 increase c.$39,745 decrease d.$71,541 increase
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The beginning inventory is 16,100 units. All of the units that were manufactured during the period and 16,100 units of the beginning inventory were sold. The beginning inventory fixed manufacturing costs are $41 per unit, and variable manufacturing costs are $96 per unit. a. Determine whether variable costing operating income is less than or greater than absorption costing operating income. b. Determine the difference in variable costing and absorption costing operating income.
1. Prepare the current-year income statement for the company using variable costing. 2. Prepare the current-year income statement for the company using absorption costing.
Tyler Company has the following information pertaining to its two product lines for last year: Variable selling and admin. expenses Direct fixed expenses Sales Direct fixed selling and admin. expenses Variable expenses Operating income Common expenses are $105,000 for the year. What is the income for Tyler Company? $102,500 $120,500 $99,000 $101,000 Product A $38,000 19,500 250,000 38,000 42,000 $112,500 " Product B $31,000 34,500 210,000 22,000 31,000 $91,500

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