Appliance Apps has the following costs associated with its production and sale of devices that allow appliances to receive commands from cell phones. Beginning Inventory 0 Units Produced 24,000 Units Sold 19,200 Selling Price per Unit $145 Variable Sales and Administration Expenses $4 Fixed Sales and Administration Expenses $936,000 Direct Material Cost per Unit $25 Direct Labor Cost per Unit $10 Variable Manufacturing Overhead Cost per Unit $3 Fixed Manufacturing Overhead Cost per Month $940,800 Question Content Area Prepare an income statement under the absorption method. If an amount box does not require an entry, leave it blank. Appliance AppsIncome Statement: Absorption $- Select - Cost of Goods Sold: $- Select - - Select - $- Select - - Select - Total Cost of Goods Sold fill in the blank c283fffd202c01d_11 $- Select - Sales and Administrative Expenses: Variable $fill in the blank c283fffd202c01d_14 Fixed fill in the blank c283fffd202c01d_15 - Select - $- Select - Question Content Area Prepare an income statement under the variable costing method. If an amount box does not require an entry, leave it blank. Appliance AppsIncome Statement: Variable $- Select - Cost of Goods Sold: $- Select - - Select - $- Select - - Select - Total Cost of Goods Sold fill in the blank fd259cffdf8e019_11 $- Select - Sales and Administrative Expenses: Variable fill in the blank fd259cffdf8e019_14 $- Select - $- Select - - Select - - Select - $- Select - Question Content Area Prepare a reconciliation between the two statements. Reconciliation $- Select - - Select - $- Select -
Cost-Volume-Profit Analysis
Cost Volume Profit (CVP) analysis is a cost accounting method that analyses the effect of fluctuating cost and volume on the operating profit. Also known as break-even analysis, CVP determines the break-even point for varying volumes of sales and cost structures. This information helps the managers make economic decisions on a short-term basis. CVP analysis is based on many assumptions. Sales price, variable costs, and fixed costs per unit are assumed to be constant. The analysis also assumes that all units produced are sold and costs get impacted due to changes in activities. All costs incurred by the company like administrative, manufacturing, and selling costs are identified as either fixed or variable.
Marginal Costing
Marginal cost is defined as the change in the total cost which takes place when one additional unit of a product is manufactured. The marginal cost is influenced only by the variations which generally occur in the variable costs because the fixed costs remain the same irrespective of the output produced. The concept of marginal cost is used for product pricing when the customers want the lowest possible price for a certain number of orders. There is no accounting entry for marginal cost and it is only used by the management for taking effective decisions.
Appliance Apps has the following costs associated with its production and sale of devices that allow appliances to receive commands from cell phones.
| Beginning Inventory | 0 |
| Units Produced | 24,000 |
| Units Sold | 19,200 |
| Selling Price per Unit | $145 |
| Variable Sales and Administration Expenses | $4 |
| Fixed Sales and Administration Expenses | $936,000 |
| Direct Material Cost per Unit | $25 |
| Direct Labor Cost per Unit | $10 |
| Variable |
$3 |
| Fixed Manufacturing Overhead Cost per Month | $940,800 |
Question Content Area
Prepare an income statement under the absorption method. If an amount box does not require an entry, leave it blank.
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$- Select - | |
| Cost of Goods Sold: | ||
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$- Select - | |
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- Select - | |
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$- Select - | |
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- Select - | |
| Total Cost of Goods Sold | fill in the blank c283fffd202c01d_11 | |
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$- Select - | |
| Sales and Administrative Expenses: | ||
| Variable | $fill in the blank c283fffd202c01d_14 | |
| Fixed | fill in the blank c283fffd202c01d_15 | |
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- Select - | |
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$- Select - |
Question Content Area
Prepare an income statement under the variable costing method. If an amount box does not require an entry, leave it blank.
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$- Select - | |
| Cost of Goods Sold: | ||
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$- Select - | |
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- Select - | |
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$- Select - | |
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- Select - | |
| Total Cost of Goods Sold | fill in the blank fd259cffdf8e019_11 | |
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$- Select - | |
| Sales and Administrative Expenses: | ||
| Variable | fill in the blank fd259cffdf8e019_14 | |
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$- Select - | |
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$- Select - | |
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- Select - | |
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- Select - | |
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$- Select - |
Question Content Area
Prepare a reconciliation between the two statements.
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$- Select - |
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- Select - |
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$- Select - |
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