Cost of Goods Manufactured, using Variable Costing and Absorption CostingOn October 31, the end of the first month of operations, Yankovich Inc. manufactured 75,000 units and sold67,500 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$9,000,000(900,000)$600,000140,000$14,600,000(8,100,000)$6,500,000(1,460,000)$5,040,000(740,000)$4,300,000Operating incomeDetermine the unit cost of goods manufactured, based on (a) the variable costing concept and (b) the absorptioncosting concept.(a) Variable costing $(b) Absorption costing $

Under absorption costing, all variable and fixed cost of goods manufactured is included in unit cost…

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

See similar textbooks

Similar questions

Income Statements under Absorption Costing and Variable Costing Fresno Industries Inc. manufactures and sells high-quality camping tents. The company began operations on January 1 and operated at 100% of capacity (70,400 units) during the first month, creating an ending inventory of 6,400 units. During February, the company produced 64,000 units during the month but sold 70,400 units at $90 per unit. The February manufacturing costs and selling and administrative expenses were as follows: Manufacturing costs in February 1 beginning inventory: Variable Fixed Total Manufacturing costs in February: Variable Fixed Total Selling and administrative expenses in February: Variable Fixed Total Number of Units Cost of goods sold: 6,400 $36.00 6,400 14.00 64,000 64,000 Unit Cost 70,400 70,400 Total Cost $230,400 89,600 $50.00 $320,000 $36.00 $2,304,000 15.40 985,600 $51.40 $3,289,600 $18.20 $1,281,280 7.00 492,800 $25.20 $1,774,080 a. Prepare an income statement according to the absorption…
Please give me step by step instruction on how to get cost of goods manufactured using the following: Cost of Goods Manufactured, using Variable and Absorption Costing On June 30, the end of the first year of operations, Johnson Industries, Inc., manufactured 6,100 units and sold 5,200 units. The following income statement was prepared, based on the variable costing concept: Johnson Industries, Inc.Variable Costing Income StatementFor the Year Ended June 30, 2016 Sales $1,300,000 Variable cost of goods sold: Variable cost of goods manufactured $732,000 Less inventory, June 30 108,000 Variable cost of goods sold 624,000 Manufacturing margin $676,000 Variable selling and administrative expenses 156,000 Contribution margin $520,000 Fixed costs: Fixed manufacturing costs $335,500 Fixed selling and administrative expenses 104,000 439,500 Income from operations $80,500 Determine the unit cost of goods manufactured,…
Inventory Valuation under Absorption Costing and Variable Costing At the end of the first year of operations, 6,000 units remained in the finished goods inventory. The unit manufacturing costs during the year were as follows: Direct materials $31.10 Direct labor 17.30 Fixed factory overhead 6.60 Variable factory overhead 5.80 Determine the cost of the finished goods inventory reported on the balance sheet under (a) the absorption costing concept and (b) the variable costing concept. Absorption costing $fill in the blank 1 Variable costing $fill in the blank 2
Inventory Valuation under Absorption Costing and Variable Costing At the end of the first year of operations, 6,200 units remained in the finished goods inventory. The unit manufacturing costs during the year were as follows: Direct materials $29.10 Direct labor 16.20 Fixed factory overhead 6.10 Variable factory overhead 5.40 Determine the cost of the finished goods inventory reported on the balance sheet under (a) the absorption costing concept and (b) the variable costing concept. Absorption costing Variable costing $
Inventory Valuation under Absorption Costing and Variable Costing At the end of the first year of operations, 6,500 units remained in the finished goods inventory. The unit manufacturing costs during the year were as follows: Direct materials $40.40 Direct labor 18.70 Fixed factory overhead 5.80 Variable factory overhead 5.10 Determine the cost of the finished goods inventory reported on the balance sheet under (a) the absorption costing concept and (b) the variable costing concept. Absorption costing $fill in the blank 1 Variable costing $fill in the blank 2
Grace Corporation, which has only one product, has provided the following data concerning its most recent month of operations: Selling price Units in beginning inventory Units produced Units sold Units in ending inventory Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative expense Fixed costs: Fixed manufacturing overhead Fixed selling and administrative expense $6,400 $18,600 $5,600 SS $(20,400) $ $ $ 95 0 3,500 3,100 400 22 What is the net operating income for the month under absorption costing? 2975 39 55,900 3,000
2. On February 28, the end of the first month of operations, Kibitz Computer Technology prepared the following income statement, based on the variable costing concept: Kibitz Computer Technology Variable Costing Income Statement For the Month Ended February 28 Sales (250,000 units) 2$ 67,000,000 Variable cost of goods sold: Variable cost of goods manufactured $ 46,000,000 Inventory, February 28 (5,500,000) Total variable cost of goods sold 40,500,000 Manufacturing margin 2$ 26,500,000 Total variable selling and admin. expenses 2,400,000 Contribution margin 2$ 24,100,000 Fixed Costs Fixed manufacturing costs $ 8,500,000 Fixed selling and admin. Expenses 375,000 Total fixed costs 8,875,000 Income from operations 15,225,000 Prepare an income statement under absorption costing.
Variable Costing Lindquist Company has the following information for February: Sales $690,000 Variable cost of goods sold 324,300 Fixed manufacturing costs 117,300 Variable selling and administrative expenses 62,100 Fixed selling and administrative expenses 41,400 Determine the following for Lindquist Company for the month of February: a. Manufacturing margin b. Contribution margin c. Operating income 365,700
Estimated income statements, using absorption and variable costingPrior to the first month of operations ending October 31, Marshall Inc.estimated the attached operating results: The company is evaluating a proposal to manufacture 50,000 unitsinstead of 40,000 units, thus creating an ending inventory of 10,000 units.Manufacturing the additional units will not change sales, unit variablefactory overhead costs, total fixed factory overhead cost, or total sellingand administrative expenses. a. Prepare an estimated income statement, comparing operatingresults if 40,000 and 50,000 units are manufactured in (1) theabsorption costing format and (2) the variable costing format.b. What is the reason for the difference in operating incomereported for the two levels of production by the absorption costingincome statement?
Philadelphia Company has the following information for March: Sales $471,872 Variable cost of goods sold 223,448 Fixed manufacturing costs 76,779 Variable selling and administrative expenses 52,438 Fixed selling and administrating expenses 32,449 Determine the March: a. Manufacturing margin $fill in the blank 1 b. Contribution margin $fill in the blank 2 c. Operating income for Philadelphia Company $fill in the blank 3
Absorption Statement Absorption costing does not distinguish between variable and fixed costs. All manufacturing costs are included in the cost of goods sold. Saxon, Inc.Absorption Costing Income StatementFor the Year Ended December 31 Sales $1,200,000 Cost of goods sold: Cost of goods manufactured $840,000 Ending inventory (168,000) Total cost of goods sold (672,000) Gross profit $528,000 Selling and administrative expenses (289,000) Operating income $239,000 Variable Statement Under variable costing, the cost of goods manufactured includes only variable manufacturing costs. This type of income statement includes a computation of manufacturing margin. Saxon, Inc.Variable Costing Income StatementFor the Year Ended December 31 Sales $1,200,000 Variable cost of goods sold: Variable cost of goods manufactured $600,000 Ending inventory (120,000) Total variable cost of goods sold (480,000) Manufacturing…
Absorption costing does not distinguish between variable and fixed costs. All manufacturing costs are included in the cost of goods sold. Saxon, Inc.Absorption Costing Income StatementFor the Year Ended December 31 Sales $1,200,000 Cost of goods sold: Cost of goods manufactured $840,000 Ending inventory (210,000) Total cost of goods sold (630,000) Gross profit $570,000 Selling and administrative expenses (290,000) Operating income $280,000 Variable Statement Under variable costing, the cost of goods manufactured includes only variable manufacturing costs. This type of income statement includes a computation of manufacturing margin. Saxon, Inc.Variable Costing Income StatementFor the Year Ended December 31 Sales $1,200,000 Variable cost of goods sold: Variable cost of goods manufactured $600,000 Ending inventory (150,000) Total variable cost of goods sold (450,000) Manufacturing margin $750,000…

SEE MORE QUESTIONS

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS