da Company produces a handcrafted musical instrument called a gamelan that is similar to a xylophone. The gamelans are sold for $870. Selected data for the company's operations last year follow. 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 Fixed costs: 0 260 230 30 Sales Cost of goods sold Gross margin Selling and administrative expense Net operating income $ 105 $325 $ 45 $ 15 Fixed manufacturing overhead $ 65,000 Fixed selling and administrative $ 21,000 The absorption costing income statement prepared by the company's accountant for last year appears below: $ 200,100 166,750 33,350 24,450 $ 8,900 Required: 1. Under absorption costing, how much fixed manufacturing overhead cost is included in the company's inventory at the end of last year? 2. Prepare an income statement for last year using variable costing.
da Company produces a handcrafted musical instrument called a gamelan that is similar to a xylophone. The gamelans are sold for $870. Selected data for the company's operations last year follow. 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 Fixed costs: 0 260 230 30 Sales Cost of goods sold Gross margin Selling and administrative expense Net operating income $ 105 $325 $ 45 $ 15 Fixed manufacturing overhead $ 65,000 Fixed selling and administrative $ 21,000 The absorption costing income statement prepared by the company's accountant for last year appears below: $ 200,100 166,750 33,350 24,450 $ 8,900 Required: 1. Under absorption costing, how much fixed manufacturing overhead cost is included in the company's inventory at the end of last year? 2. Prepare an income statement for last year using variable costing.
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter2: Basic Managerial Accounting Concepts
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Problem 58P: Cost of Goods Manufactured, Income Statement W. W. Phillips Company produced 4,000 leather recliners...
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Transcribed Image Text:Ida Company produces a handcrafted musical instrument called a gamelan that is similar to a xylophone. The gamelans are sold for
$870. Selected data for the company's operations last year follow.
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
Fixed costs:
260
230
30
Sales
Cost of goods sold
Gross margin
Selling and administrative expense
Net operating income
$ 105
$325
$ 45
$15
Fixed manufacturing overhead
$ 65,000
Fixed selling and administrative
$ 21,000
The absorption costing income statement prepared by the company's accountant for last year appears below:
$ 200,100
166,750
33,350
24,450
$ 8,900
Required:
1. Under absorption costing, how much fixed manufacturing overhead cost is included in the company's inventory at the end of last
year?
2. Prepare an income statement for last year using variable costing.
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