Audiophonics Limited manufactures and sells high-quality and durable ear buds for use with personal electronics that are custom moulded to each customer's ear. Cost data for the product follow: Variable costs per unit: Direct materials Direct labour Variable factory overhead Variable selling and administrative Total variable costs per unit Fixed costs per month: Fixed manufacturing overhead Fixed selling and administrative Total fixed cost per month May June Sales Cost of goods sold: Beginning inventory Add cost of goods manufactured Goods available for sale Units Sold 15,800 25,400 $ The product sells for $63 per unit. Production and sales data for May and June, the first two months of operations, are as follows: Units Produced 20,600 20,600 Less ending inventory Cost of goods sold Gross margin Selling and administrative expenses Operating income $ a. Absorption costing b. Variable costing 7 18 9 4 38 Income statements prepared by the Accounting Department using absorption costing are presented below: $267,800 226,600 $494,400 May June $995,400 $1,600,200 0 968, 200 968, 200 Required: 1. Determine the unit product cost under each of the following methods. 225,600 968, 200 1,193,800 225,600 742,600 252,800 289,800 $ (37,000) $ 0 1,193,800 406,400 328,200 78, 200
Audiophonics Limited manufactures and sells high-quality and durable ear buds for use with personal electronics that are custom moulded to each customer's ear. Cost data for the product follow: Variable costs per unit: Direct materials Direct labour Variable factory overhead Variable selling and administrative Total variable costs per unit Fixed costs per month: Fixed manufacturing overhead Fixed selling and administrative Total fixed cost per month May June Sales Cost of goods sold: Beginning inventory Add cost of goods manufactured Goods available for sale Units Sold 15,800 25,400 $ The product sells for $63 per unit. Production and sales data for May and June, the first two months of operations, are as follows: Units Produced 20,600 20,600 Less ending inventory Cost of goods sold Gross margin Selling and administrative expenses Operating income $ a. Absorption costing b. Variable costing 7 18 9 4 38 Income statements prepared by the Accounting Department using absorption costing are presented below: $267,800 226,600 $494,400 May June $995,400 $1,600,200 0 968, 200 968, 200 Required: 1. Determine the unit product cost under each of the following methods. 225,600 968, 200 1,193,800 225,600 742,600 252,800 289,800 $ (37,000) $ 0 1,193,800 406,400 328,200 78, 200
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:Audiophonics Limited manufactures and sells high-quality and durable ear buds for use with personal electronics that are custom
moulded to each customer's ear. Cost data for the product follow:
Variable costs per unit:
Direct materials
Direct labour
Variable factory overhead
Variable selling and administrative
Total variable costs per unit
Fixed costs per month:
Fixed manufacturing overhead
Fixed selling and administrative
Total fixed cost per month
May
June
Sales
Cost of goods sold:
Beginning inventory
Add cost of goods manufactured
Goods available for sale
Units Sold
15,800
25,400
$
The product sells for $63 per unit. Production and sales data for May and June, the first two months of operations, are as follows:
Units Produced
20,600
20,600
Less ending inventory
Cost of goods sold
Gross margin
Selling and administrative expenses
Operating income
$
a. Absorption costing
b. Variable costing
7
18
9
4
38
Income statements prepared by the Accounting Department using absorption costing are presented below:
$267,800
226,600
$494,400
May
June
$995,400 $1,600,200
0
968, 200
968, 200
Required:
1. Determine the unit product cost under each of the following methods.
225,600
968, 200
1,193,800
225,600
742,600
252,800
289,800
$ (37,000) $
0
1,193,800
406,400
328,200
78, 200
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