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Denton Company manufactures and sells a single product. Cost data for the product are given: Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Total variable cost per unit Fixed costs per month: Fixed manufacturing overhead Fixed selling and administrative $ 135,000 169,000 Total fixed cost per month $ 304,000 The product sells for $54 per unit. Production and sales data for July and August, the first two months of operations, follow: July August Units Produced 27,000 27,000 Units Sold 23,000 31,000 Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income $4 9 4 1 $18 The company's Accounting Department has prepared the following absorption costing income statements for July and August July August $ 1,242,000 $1,674,000 506,000 736,000 192,000 $544,000 Required: 1. Determine the unit product cost under: a. Absorption costing. b. Variable costing. 7 Dranare variable cortinn Income statemente for the and Aunet 682,000 992,000 200,000 $ 792,000

Denton Company manufactures and sells a single product. Cost data for the product are given: Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Total variable cost per unit Fixed costs per month: Fixed manufacturing overhead Fixed selling and administrative $ 135,000 169,000 Total fixed cost per month $ 304,000 The product sells for $54 per unit. Production and sales data for July and August, the first two months of operations, follow: July August Units Produced 27,000 27,000 Units Sold 23,000 31,000 Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income $4 9 4 1 $18 The company's Accounting Department has prepared the following absorption costing income statements for July and August July August $ 1,242,000 $1,674,000 506,000 736,000 192,000 $544,000 Required: 1. Determine the unit product cost under: a. Absorption costing. b. Variable costing. 7 Dranare variable cortinn Income statemente for the and Aunet 682,000 992,000 200,000 $ 792,000

FINANCIAL ACCOUNTING
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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Required: 1. Determine the unit product cost under: a. Absorption costing. b. Variable costing. 2. Prepare variable costing income statements for July and August. 3. Reconcile the variable costing and absorption costing net operating incomes.
Transcribed Image Text:Required: 1. Determine the unit product cost under: a. Absorption costing. b. Variable costing. 2. Prepare variable costing income statements for July and August. 3. Reconcile the variable costing and absorption costing net operating incomes.
Denton Company manufactures and sells a single product. Cost data for the product are given: Variable costs per unit: Direct materials. Direct labor Variable manufacturing overhead Variable selling and administrative Total variable cost per unit Fixed costs per month: Fixed manufacturing overhead $ 135,000 Fixed selling and administrative 169,000 Total fixed cost per month $ 304,000 The product sells for $54 per unit. Production and sales data for July and August, the first two months of operations, follow: Units Produced July August Units Sold 23,000 31,000 The company's Accounting Department has prepared the following absorption costing income statements for July and August: July August $ 1,242,000 $ 1,674,000 506,000 682,000 736,000 192,000 $544,000 27,000 27,000 $4 9 4 1 $18 Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Required: 1. Determine the unit product cost under: a. Absorption costing. b. Variable costing. 7 Dronare variable cortinn Income etatemente for lukcand Aunet 992,000 200,000 $ 792,000
Transcribed Image Text:Denton Company manufactures and sells a single product. Cost data for the product are given: Variable costs per unit: Direct materials. Direct labor Variable manufacturing overhead Variable selling and administrative Total variable cost per unit Fixed costs per month: Fixed manufacturing overhead $ 135,000 Fixed selling and administrative 169,000 Total fixed cost per month $ 304,000 The product sells for $54 per unit. Production and sales data for July and August, the first two months of operations, follow: Units Produced July August Units Sold 23,000 31,000 The company's Accounting Department has prepared the following absorption costing income statements for July and August: July August $ 1,242,000 $ 1,674,000 506,000 682,000 736,000 192,000 $544,000 27,000 27,000 $4 9 4 1 $18 Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Required: 1. Determine the unit product cost under: a. Absorption costing. b. Variable costing. 7 Dronare variable cortinn Income etatemente for lukcand Aunet 992,000 200,000 $ 792,000
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