Cost of Goods Manufactured, using Variable Costing and Absorption CostingOn October 31, the end of the first year of operations, Yankovich Inc. manufactured 2,500 units and sold 2,200 units. The following income statement was prepared, based on the variable costing concept:Yankovich Inc.Variable Costing Income StatementFor the Month Ended October 31SalesVariable cost of goods sold:Variable cost of goods manufacturedInventory, October 31Total variable cost of goods soldManufacturing marginTotal variable selling and administrative expensesContribution marginFixed costs:Fixed manufacturing costsFixed selling and administrative expensesTotal fixed costs$565,000(67,800)$257,50083,600$1,034,000(497,200)$536,800(123,200)$413,600(341,100)$72,500Operating incomeDetermine the unit cost of goods manufactured, based on (a) the variable costing concept and (b) the absorption costing concept.(a) Variable costing $(b) Absorption costing $

ABSORPTION COSTINGAbsorption Costing is a Cost Management Accounting method in which all costs…

Answered: Cost of Goods Manufactured, using…

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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Joshua Company has determined the following selling price and manufacturing cost per unit based on normal production of 72,000 units per year: Selling price per unit.. $ 22 Variable cost per unit: Direct materials... $ 4 Direct labor ..... 4 Variable factory overhead.. 2 Variable cost per unit $ 10 Fixed costs: Fixed factory overhead per year $ 360,000 Fixed selling and administrative expense per year........ 48,000 Month Units Produced Units Sold October.. 6,000 3,000 November ...... 1,000 4,000 December...... 8,000 6,000 October has no beginning inventories. REQUIRED: Prepare comparative income statements, including a comparative schedule of cost of goods sold, for each of these three months in 2016 under each of the following: 1. Absorption costing (include under- or overapplied overhead). 2. Variable costing.
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On October 31, the end of the first month of operations, Maryville Equipment Company prepared the following income statement, based on the variable costing concept: Line Item Description Amount Amount Sales (13,400 units) $750,400 Variable cost of goods sold: Variable cost of goods manufactured $343,200 Inventory, October 31 (2,200 units) (48,400) Total variable cost of goods sold (294,800) Manufacturing margin $455,600 Variable selling and administrative expenses (201,000) Contribution margin $254,600 Fixed costs: Fixed manufacturing costs $62,400 Fixed selling and administrative expenses 53,600 Total fixed costs (116,000) Operating income $138,600 Prepare an income statement under absorption costing. Round all final answers to whole dollars. Maryville Equipment CompanyAbsorption Costing Income StatementFor the Month Ended October 31 Line Item Description Amount Amount $Sales Cost of goods sold:…
Cost of Goods Manufactured, using Variable Costing and Absorption Costing On March 31, the end of the first year of operations, Barnard Inc., manufactured 3,300 units and sold 2,800 units. The following income statement was prepared, based on the variable costing concept: Sales Variable cost of goods sold: Variable cost of goods manufactured Inventory, March 31 Total variable cost of goods sold Manufacturing margin Total variable selling and administrative expenses Contribution margin Fixed costs: Barnard Inc. Variable Costing Income Statement For the Year Ended March 31, 20Y1 Fixed manufacturing costs Fixed selling and administrative expenses Total fixed costs Operating income Variable costing Absorption costing $508,200 (77,000) $231,000 72,800 $896,000 (431,200) $464,800 (106,400) $358,400 (303,800) $54,600 Determine the unit cost of goods manufactured, based on (a) the variable costing concept and (b) the absorption costing concept.
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The level of inventory of a manufactured product has increased by 7,848 units during a period. The following data are also available Variable Fixed Unit manufacturing costs of the period $11.00 $3.00 Unit operating expenses of the period 2.00 5.00 The effect on operating income if variable costing is used rather than absorption costing would be a(n) Oa. $23,544 increase Ob. $62,784 decrease Oc. $62,784 increase Od. $23,544 decrease
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Variable Costing Income Statement On April 30, the end of the first month of operations, Joplin Company prepared the following income statement, based on the absorption costing concept: Joplin CompanyAbsorption Costing Income StatementFor the Month Ended April 30 Sales (6,600 units) $178,200 Cost of goods sold: Cost of goods manufactured (7,700 units) $146,300 Inventory, April 30 (1,100 units) (20,900) Total cost of goods sold (125,400) Gross profit $52,800 Selling and administrative expenses (32,280) Operating income $20,520 If the fixed manufacturing costs were $39,501 and the fixed selling and administrative expenses were $15,810, prepare an income statement according to the variable costing concept. Round all final answers to whole dollars. Joplin CompanyVariable Costing Income StatementFor the Month Ended April 30 $Sales Variable cost of goods sold: $Variable cost of goods manufactured…
Differential Analysis for a Discontinued Product The condensed product-line income statement for Rhinebeck Company for the month of October is as follows: Sales Cost of goods sold Gross profit Selling and administrative expenses Operating income (loss) Rhinebeck Company Revenues. Costs: Product-Line Income Statement For the Month Ended October 31 Fixed costs Variable cost of goods sold Variable selling and admin. expenses Profit (Loss) Hats Fixed costs are 15% of the cost of goods sold and 42% of the selling and administrative expenses. Rhinebeck Company assumes that fixed costs would not be materially affected if the Gloves line were discontinued. a. Prepare a differential analysis dated October 31 to determine if Mufflers should be continued (Alternative 1) or discontinued (Alternative 2). If an amount is zero, enter "0". If required, use a minus sign to indicate a loss. $65,200 (27,000) $38,200 (28,500) $9,700 Differential Analysis Continue (Alt. 1) or Discontinue (Alt. 2) Mufflers…
Michie Company's management accountant prepared the following income statement relating to its second year of operations using the absorption costing format: Michie Company Income Statement (Absorption Costing) Year Ended December 31, Year 2 Sales Cost of goods sold: Beginning inventory Variable and fixed manufacturing costs Cost of goods available for sale Less ending inventory Total cost of goods sold Gross margin Less operating costs: Variable selling and administrative costs Fixed selling and administrative costs Net income (50,000 x $ 20.00) (10,000 $ 10.00*) (45,000 x $ 10.00*) (55,000 $10.00) (5,000 * $ 10.00) $ 1,000,000 $ 100,000 450,000 550,000 50,000 (500,000) $ 500,000 (50,000 x $ 2.00) $ 100,000 150,000 Variable manufacturing costs of $8.00 plus fixed manufacturing costs of $2.00. (250,000) $ 250,000
On October 31, the end of the first month of operations, Maryville Equipment Company pre- pared the following income statement, based on the variable costing concept: Maryville Equipment Company Variable Costing Income Statement For the Month Ended October 31 Sales (220,000 units).... $ 7,920,000 Variable cost of goods sold: Variable cost of goods manufactured . Inventory, October 31 (45,000 units) .. Total variable cost of goods sold... Manufacturing margin....... Variable selling and administrative expenses $ 6,360,000 (1,080,000) (5,280,000) $ 2,640,000 (330,000) $ 2,310,000 Contribution margin... Fixed costs: Fixed manufacturing costs ... Fixed selling and administrative expenses.. $ 530,000 100,000 Total fixed costs.... (630,000) $ 1,680,000 Operating income... Prepare an income statement under absorption costing.

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