ABC Company produces a single product. Operating data for thecompany and its absorption costing income statement for the last yearare presented below:ParticularsUnits in beginning inventoryUnits producedAmount09,000Units sold7,000Sales1,00,000Less: Cost of goods sold:Beginning inventoryAdd: Cost of goods manufactured54,000Goods available for sale54,000Less: Ending inventory12,000Cost of goods sold42,000Gross margin58,000Less: Selling and administrative expenses28,000Net operating income30,000Variable manufacturing costs are $4 per unit. Fixed manufacturingoverhead totals $18,000 for the year. The fixed manufacturing overheadwas applied at a rate of $2 per unit. Variable selling and administrativeexpenses were $1 per unit soldRequired:Prepare a new income statement for the year using variable costing.

To prepare an income statement using variable costing, we only include variable production costs in…

Answered: ABC Company produces a single product.…

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter9: Working Capital

Section: Chapter Questions

Problem 26E

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Similar questions

The following information is available for Cooke Company for the current year: The gross margin is 40% of net sales. What is the cost of goods available for sale? a. 5840,000 b. 960,000 c. 1,200,000 d. 1,220,000
Cost of Goods Manufactured, Income Statement W. W. Phillips Company produced 4,000 leather recliners during the year. These recliners sell for 400 each. Phillips had 500 recliners in finished goods inventory at the beginning of the year. At the end of the year, there were 700 recliners in finished goods inventory. Phillips accounting records provide the following information: Required: 1. Prepare a statement of cost of goods manufactured. 2. Compute the average cost of producing one unit of product in the year. 3. Prepare an income statement for external users.
What are the total costs to account for if a companys beginning inventory had $231,432 in materials, $186,450 in conversion costs, and added direct material costs ($4,231,392), direct labor ($2,313,392), and manufacturing overhead ($1,156,696)?
Akira Company had the following transactions for the month. Calculate the gross margin for the period for each of the following cost allocation methods, using periodic inventory updating. Assume that all units were sold for $25 each. Provide your calculations. A. first-in, first-out (FIFO) B. last-in, first-out (LIFO) C. weighted average (AVG)
Bleistine Company had the following transactions for the month. Calculate the gross margin for the period for each of the following cost allocation methods, using periodic inventory updating. Assume that all units were sold for $50 each. Provide your calculations. A. first-in, first-out (FIFO) B. last-in, first-out (LIFO) C. weighted average (AVG)
Winner Company has two products with cost and selling price as follows: Product X Product Y Selling price 2,000,000 3,000,000 Estimated selling cost 600,000 700,000 Materials and conversion cost 1,500,000 1,800,000 General administration cost 300,000 800,000 At year-end, the manufacture of inventory has been completed but no selling cost has yet been incurred. Under LCNRV by individual item, the inventory shall be measured at what amount?
Bonita Industries reported the following year-end information: beginning work in process inventory, S72000; cost of goods manufactured, S670000; beginning finished goods inventory, $42000; ending work in process inventory, S62000; and ending finished goods inventory, $32000. How much is Bonita's cost of goods sold for the year? A. S660000 B. $680000 C. $690000 D. $670000
All applicable Cases are available with McGraw-Hill’s Connect™Accounting. Cost of goods manufactured, cost of goods sold, and income statement Determine each of the following missing amounts:Firm A Firm B Firm CBeginning raw materials inventory . . . . . . . . . . . . . . . . . $ 17,000 $ ? $ 42,000Purchases of raw materials during the year . . . . . . . . . . ? 96,000 226,000Raw materials available for use . . . . . . . . . . . . . . . . . . . ? 119,000 ?Ending raw materials inventory . . . . . . . . . . . . . . . . . . . 12,000 ? 51,000Cost of raw materials used . . . . . . . . . . . . . . . . . . . . . . 90,000 101,000 ?Direct labor costs incurred. . . . . . . . . . . . . . . . . . . . . . . 130,000 ? 318,000Variable manufacturing overhead applied. . . . . . . . . . . . ? 34,000 72,000Fixed manufacturing overhead applied. . . . . . . . . . . . . . 100,000 60,000 ?Total manufacturing costs incurred . . . . . . . . . . . . . . . . 370,000 ? ?Beginning work in process. . . . . . . . .…
Circetrax, Inc. has provided the following financial information for the year: Finished Goods Inventory: Beginning balance, in units Units produced Units sold Ending balance, in units Production costs: Variable manufacturing costs per unit Total fixed manufacturing costs What is the unit product cost for the year using absorption costing? OA. $117 630 1,400 1,500 530 $50 $42,000 W
Prepare the income statement using the absorption costing method
ElectronPlus manufactures and sells a unique electronic part. Operating results for the first three years of activity were as follows (absorption costing basis): Sales Cost of goods sold: Beginning inventory Add: cost of goods manufactured Goods available for sale Less: ending inventory Cost of goods sold Gross margin Selling and administrative expenses Operating income (loss) Production in units Sales in units. Year 1 $1,033,000 Year 1 59,000 59,000 $ 0 Year 2 69,000 49,000 Year 2 Year 3 $826,400 $1,033,000 Sales dropped by 20% during year 2 due to the entry of several foreign competitors into the market. ElectronPlus had expected sales to remain constant at 59,000 units for the year; production was set at 69,000 units in order to build a buffer against unexpected spurts in demand. By the start of year 3, management could see that spurts in demand were unlikely and that the inventory was excessive. To work off the excessive inventories, ElectronPlus cut back production during year 3,…
Compute for the net operating income under variable costing for year 1 Puif Company's absorption costing income statements for the last two years are presented below: Year 1 Year 2 Sales $70,000 $90,000 Less cost of goods sold: Beginning inventory Add cost of goods manufactured 6,000 48,000 48,000 Goods available for sale 48,000 54,000 Less ending inventory | Cost of goods sold Gross margin Less selling & admin. expenses 6,000 42,000 54,000 28,000 36,000 25,000 31,000 |Net operating income $ 3,000 $ 5,000 Data on units produced and sold in each of these years are given below: Year 1 Year 2 Units in beginning inventory Units produced Units sold 1,000 8,000 8,000 7,000 9,000 Fixed factory overhead totaled $16,000 in each year. This overhead was applied to products at a rate of $2 per unit. Variable selling and administrative expenses were $3 per unit sold.

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