Answered: Data table 1 2 Unit data: 3 Beginning…

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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Question

speedt Motors assembles and sells motor vehicles and uses standard costing. Actual data relating to April and May 2020are as follows the selling price per vehicle is $30,000.The budgeted level of production used to calculate the budgeted fixed manufacturing cost per unit is 400units.

There are no price, efficiency, or spending variances. Any production-volume variance is written off to cost of goods sold in the month in which it occurs.

a) Prepare April and May 2020 income statements for Speedy Motors under variable costing. Complete the top half of the income statement for each month first, then complete the bottom portio

Data table
1
W|N
2 Unit data:
3
4
Beginning inventory
Production
5
Sales
6 Variable costs:
7
8
9 Fixed costs:
10
Manufacturing costs
11 Operating (marketing) costs
Manufacturing cost per unit produced $
Operating (marketing) cost per unit sold
Print
$
April
0
400
250
Done
11,000 $
3,600
May
150
375
505
11,000
3,600
2,000,000 $ 2,000,000
800,000
800,000
I
X

Revenues
Variable cost of goods sold:
Beginning inventory
Variable manufacturing costs
Cost of goods available for sale
Deduct ending inventory
Variable cost of goods sold
April 2020
May 2020

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

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