Cost of Goods Manufactured, using Variable Costing and Absorption CostingOn March 31, the end of the first year of operations, Barnard Inc., manufactured 2,000 units and sold 1,700 units. The following income statement was prepared, based on the variable costing concept:Barnard Inc.Variable Costing Income StatementFor the Year Ended March 31, 20Y1Sales $646,000 Variable cost of goods sold: Variable cost of goods manufactured$364,000 Inventory, March 31(54,600) Total variable cost of goods sold (309,400) Manufacturing margin $336,600 Total variable selling and administrative expenses (78,200) Contribution margin $258,400 Fixed costs: Fixed manufacturing costs$168,000 Fixed selling and administrative expenses51,000 Total fixed costs (219,000) Operating income $39,400 Determine the unit cost of goods manufactured, based on (a) the variable costing concept and (b) the absorption costing concept.Variable costing$fill in the blank 1Absorption costing$fill in the blank 2

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

Related questions

Question

Cost of Goods Manufactured, using Variable Costing and Absorption Costing

On March 31, the end of the first year of operations, Barnard Inc., manufactured 2,000 units and sold 1,700 units. The following income statement was prepared, based on the variable costing concept:

Barnard Inc. Variable Costing Income Statement For the Year Ended March 31, 20Y1
Sales		$646,000
Variable cost of goods sold:
Variable cost of goods manufactured	$364,000
Inventory, March 31	(54,600)
Total variable cost of goods sold		(309,400)
Manufacturing margin		$336,600
Total variable selling and administrative expenses		(78,200)
Contribution margin		$258,400
Fixed costs:
Fixed manufacturing costs	$168,000
Fixed selling and administrative expenses	51,000
Total fixed costs			(219,000)
Operating income		$39,400

Determine the unit cost of goods manufactured, based on (a) the variable costing concept and (b) the absorption costing concept.

Variable costing	$fill in the blank 1
Absorption costing	$fill in the blank 2

Expert Solution

Step 1

Cost of Manufacture :— Cost of Goods Manufactured include all cost which is Directly related to Manufacturing of Goods.

The Cost of Goods Manufactured is the total manufacturing costs of goods that are finished during a certain accounting period.

Cost of Goods Manufactured Computed

= Direct Material Used + Direct Labour + Factory Cost (Manufacturing OH)

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions