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Audiophonics Limited manufactures and sells high-quality and durable ear buds for use with personal electronics that are cus 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 Units Produced 22, 200 22, 200 $ Units Sold 16,600 27,800 $ The product sells for $63 per unit. Production and sales data for May and June, the first two months of operations, are as foll 13 19 4 5 41 $222,000 199,800 $421,800

Audiophonics Limited manufactures and sells high-quality and durable ear buds for use with personal electronics that are cus 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 Units Produced 22, 200 22, 200 $ Units Sold 16,600 27,800 $ The product sells for $63 per unit. Production and sales data for May and June, the first two months of operations, are as foll 13 19 4 5 41 $222,000 199,800 $421,800

FINANCIAL ACCOUNTING
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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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 $ Units Sold 16,600 27,800 $ 13 19 4 5 41 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 22, 200 22, 200 $222,000 199,800 $421,800
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 $ Units Sold 16,600 27,800 $ 13 19 4 5 41 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 22, 200 22, 200 $222,000 199,800 $421,800
2. Prepare variable costing income statements for May and June using the contribution approach. (Do not leave any empty spaces; input a 0 wherever it is required.) Variable expenses: Variable cost of goods sold: Total variable expenses Fixed expenses: Total fixed expenses Total fixed expenses Operating income (loss) May Variable costing operating income (loss) Add: Cost deferred in inventory under absorption costing 3. Reconcile the variable costing and absorption costing operating income figures. (Loss amounts should be indicated with a minus sign.) June Deduct: Cost released from inventory under absorption costing Absorption costing operating income May June
Transcribed Image Text:2. Prepare variable costing income statements for May and June using the contribution approach. (Do not leave any empty spaces; input a 0 wherever it is required.) Variable expenses: Variable cost of goods sold: Total variable expenses Fixed expenses: Total fixed expenses Total fixed expenses Operating income (loss) May Variable costing operating income (loss) Add: Cost deferred in inventory under absorption costing 3. Reconcile the variable costing and absorption costing operating income figures. (Loss amounts should be indicated with a minus sign.) June Deduct: Cost released from inventory under absorption costing Absorption costing operating income May June
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