Cool Car Motors assembles and sells motor vehicles and uses standard costing. Actual data relating to April and May 2018 are provided. (Click to view the data.) The selling price per vehicle is $28,000. The budgeted level of production used to calculate the budgeted fixed manufacturing cost per unit is 500 units. There are no price, efficiency, or rate variances. Any production-volume variance is written off to COGS in the month in which occurs. Required 1. Prepare April and May 2018 statements of comprehensive income for Cool Car Motors under (a) variable costing and (b) absorption costing. 2. Prepare a numerical reconciliation and explanation of the difference between operating income for each month under variable costing and absorption costing. Requirement 1a. Prepare April and May 2018 statements of comprehensive income for Cool Car Motors under variable costing. Complete the top half of the statement of comprehensive income for each month first, and then complete the bottom portion. (Enter a "0" for any zero balance accounts.) April 2018 May 2018 Less: Data Unit data: Beginning inventory Production Sales Variable costs: Manufacturing cost per unit produced $ Operating (marketing) cost per unit sold Fixed costs: Manufacturing costs Operating (marketing) costs Print April 0 Done 500 400 10,000 $ 3,200 May 100 425 475 10,000 3,200 $ 2,250,000 $2,250,000 675,000 675,000 - X
Cool Car Motors assembles and sells motor vehicles and uses standard costing. Actual data relating to April and May 2018 are provided. (Click to view the data.) The selling price per vehicle is $28,000. The budgeted level of production used to calculate the budgeted fixed manufacturing cost per unit is 500 units. There are no price, efficiency, or rate variances. Any production-volume variance is written off to COGS in the month in which occurs. Required 1. Prepare April and May 2018 statements of comprehensive income for Cool Car Motors under (a) variable costing and (b) absorption costing. 2. Prepare a numerical reconciliation and explanation of the difference between operating income for each month under variable costing and absorption costing. Requirement 1a. Prepare April and May 2018 statements of comprehensive income for Cool Car Motors under variable costing. Complete the top half of the statement of comprehensive income for each month first, and then complete the bottom portion. (Enter a "0" for any zero balance accounts.) April 2018 May 2018 Less: Data Unit data: Beginning inventory Production Sales Variable costs: Manufacturing cost per unit produced $ Operating (marketing) cost per unit sold Fixed costs: Manufacturing costs Operating (marketing) costs Print April 0 Done 500 400 10,000 $ 3,200 May 100 425 475 10,000 3,200 $ 2,250,000 $2,250,000 675,000 675,000 - X
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:Cool Car Motors assembles and sells motor vehicles and uses standard costing. Actual data relating to April and May 2018 are provided.
(Click to view the data.)
The selling price per vehicle is $28,000. The budgeted level of production used to calculate the budgeted fixed manufacturing cost per unit is 500 units. There are no price, efficiency, or rate variances. Any production-volume variance is written off to COGS in the month in which it
occurs.
Required
1. Prepare April and May 2018 statements of comprehensive income for Cool Car Motors under (a) variable costing and (b) absorption costing.
2. Prepare a numerical reconciliation and explanation of the difference between operating income for each month under variable costing and absorption costing.
Requirement 1a. Prepare April and May 2018 statements of comprehensive income for Cool Car Motors under variable costing.
Complete the top half of the statement of comprehensive income for each month first, and then complete the bottom portion. (Enter a "0" for any zero balance accounts.)
May 2018
April 2018
Less:
C
00
Data
Unit data:
Beginning inventory
Production
Sales
Variable costs:
Manufacturing cost per unit produced
Operating (marketing) cost per unit sold
Fixed costs:
Manufacturing costs
Operating (marketing) costs
Print
$
April
0
500
400
Done
10,000 $
3,200
May
100
425
475
10,000
3,200
$ 2,250,000 $ 2,250,000
675,000
675,000
- X
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