Bristol Confections, Inc. is a new company that produces a single product. The company has no beginning inventory. During the year, the company produced 12,000 units, out of which 11,000 were sold. Below are Bristol's costs: Variable costs per unit: • • Production: $5.50 Selling and administrative: $3.00 Total fixed costs for the year: • • Production: $24,000 Selling and administrative: $90,000 a) What is the unit product cost using absorption costing? b) What is the unit product cost using variable costing?

Bristol Confections, Inc. is a new company that produces a single product. The company has no beginning inventory. During the year, the company produced 12,000 units, out of which 11,000 were sold. Below are Bristol's costs: Variable costs per unit: • • Production: $5.50 Selling and administrative: $3.00 Total fixed costs for the year: • • Production: $24,000 Selling and administrative: $90,000 a) What is the unit product cost using absorption costing? b) What is the unit product cost using variable costing?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 24E: Last year, Orsen Company produced 25,000 juicers and sold 26,500 juicers for 60 each. The actual...

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Last year, Orsen Company produced 25,000 juicers and sold 26,500 juicers for 60 each. The actual variable unit cost is as follows: Fixed overhead was 320,000. Fixed selling expenses consisted of advertising copayments totaling 110,000. Fixed administrative expenses were 236,000. There were no beginning and ending work-in-process inventories. Beginning finished goods inventory was 148,000 for 4,000 juicers. The value of ending inventory reported on the financial statements was Refer to the information in 2.24. The gross margin percentage for last year was a. 12.57% b. 55.67% c. 28.95% d. 38.33%
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Pattison Products, Inc., began operations in October and manufactured 40,000 units during the month with the following unit costs: Fixed overhead per unit = 280,000/40,000 units produced = 7. Total fixed factory overhead is 280,000 per month. During October, 38,400 units were sold at a price of 24, and fixed marketing and administrative expenses were 130,500. Required: 1. Calculate the cost of each unit using absorption costing. 2. How many units remain in ending inventory? What is the cost of ending inventory using absorption costing? 3. Prepare an absorption-costing income statement for Pattison Products, Inc., for the month of October. 4. What if November production was 40,000 units, costs were stable, and sales were 41,000 units? What is the cost of ending inventory? What is operating income for November?
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Bethany Company has just completed the first month of producing a new product but has not yet shipped any of this product. The product incurred variable manufacturing costs of 5,000,000, fixed manufacturing costs of 2,000,000, variable marketing costs of 1,000,000, and fixed marketing costs of 3,000,000. Under the variable costing concept, the inventory value of the new product would be: a. 5,000,000. b. 6,000,000. c. 8,000,000. d. 11,000,000.
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Sierra Company incurs the following costs to produce and sell its only product. Variable costs per unit: Direct materials $ 9 Direct labor $ 8 Variable manufacturing overhead $ 3 Variable selling and administrative expenses $ 4 Fixed costs per year: Fixed manufacturing overhead $ 60,000 Fixed selling and administrative expenses $ 305,000 During this year, 30,000 units were produced and 25,250 units were sold. The Finished Goods inventory account at the end of this year shows a balance of $95,000 for the 4,750 unsold units. Required: 1-a. Calculate this year's ending balance in Finished Goods inventory two ways—using variable costing and using absorption costing. 1-b. Does it appear that the company is using variable costing or absorption costing to assign costs to the 4,750 units in its Finished Goods inventory? 2. Assume that the company wishes to prepare this year's financial statements for its stockholders. a. Is Finished Goods inventory…
The following information for the past year for the Magic Corporation has been provided: Fixed costs: Manufacturing Marketing $150,000 24,000 Administrative 18,000 Variable costs: Manufacturing Marketing Administrative $118,000 24,000 36,000 During the year, the company produced and sold 70,000 units of product at a selling price of $19.34 per unit. There was no beginning inventory of product at the beginning of the year. What is the contribution margin per unit for the company? (Round any intermediary calculations and your final answer to the nearest cent.) O A. $16.8 O B. $2.54 O C. $5.29 O D. $16.6