Coverall Inc. produces and sells a unique type of case for a standard-size tablet computer that is guaranteed waterproof but still allows for regular functionality of the tablet. The company has just opened a new plant to manufacture these cases, and the following cost and revenue data have been provided for the first month of the plant’s operation in the form of a worksheet: Beginning inventory $ 0 Units produced 38,000 Units sold 24,000 Selling price per unit $ 95 Selling and administrative expenses: Variable per unit $ 11 Fixed (total) $ 672,000 Manufacturing costs: Direct materials cost per unit $ 16 Direct labour cost per unit $ 12 Variable manufacturing overhead cost per unit $ 6 Fixed manufacturing overhead cost (total) $ 1,064,000 Since the new case is unique in design, management is anxious to see how profitable it will be and has asked that an income statement be prepared for the month. Required: 1. Assume that the company uses absorption costing. a. Determine the unit product cost. b. Prepare an income statement for the month. (Do not leave any empty spaces; input a 0 wherever it is required.) 2. Assume that the company uses variable costing. a. Determine the unit product cost. b. Prepare a contribution format income statement for the month. (Do not leave any empty spaces; input a 0 wherever it is required.) Please don't provide solutions in an image format thanku
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Coverall Inc. produces and sells a unique type of case for a standard-size tablet computer that is guaranteed waterproof but still allows for regular functionality of the tablet. The company has just opened a new plant to manufacture these cases, and the following cost and revenue data have been provided for the first month of the plant’s operation in the form of a worksheet:
| Beginning inventory | $ | 0 | |
| Units produced | 38,000 | ||
| Units sold | 24,000 | ||
| Selling price per unit | $ | 95 | |
| Selling and administrative expenses: | |||
| Variable per unit | $ | 11 | |
| Fixed (total) | $ | 672,000 | |
| Direct materials cost per unit | $ | 16 | |
| Direct labour cost per unit | $ | 12 | |
| Variable manufacturing |
$ | 6 | |
| Fixed manufacturing overhead cost (total) | $ | 1,064,000 | |
Since the new case is unique in design, management is anxious to see how profitable it will be and has asked that an income statement be prepared for the month.
Required:
1. Assume that the company uses absorption costing.
a. Determine the unit product cost.
b. Prepare an income statement for the month. (Do not leave any empty spaces; input a 0 wherever it is required.)
2. Assume that the company uses variable costing.
a. Determine the unit product cost.
b. Prepare a contribution format income statement for the month. (Do not leave any empty spaces; input a 0 wherever it is required.)
Please don't provide solutions in an image format thanku
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