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 July August Total variable cost per unit Fixed costs per month: Fixed manufacturing overhead Fixed selling and administrative Total fixed cost per month. The product sells for $48 per unit. Production and sales data for July and August, the first two months of operations, follow: Units Produced. 27,000 27,000 Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income $ 5 11 Required: 1. Determine the unit product cost under: a. Absorption costing. b. Variable costing. 3 2 $ 21 Units Sold 23,000 31,000 $ 108,000 172,000 $ 280,000 The company's Accounting Department has prepared the following absorption costing income statements for July and August: July August $ 1,104,000 $ 1,488,000 529,000 713,000 575,000 218,000 775,000 234,000 $ 357,000 $ 541,000 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 July August Total variable cost per unit Fixed costs per month: Fixed manufacturing overhead Fixed selling and administrative Total fixed cost per month. The product sells for $48 per unit. Production and sales data for July and August, the first two months of operations, follow: Units Produced. 27,000 27,000 Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income $ 5 11 Required: 1. Determine the unit product cost under: a. Absorption costing. b. Variable costing. 3 2 $ 21 Units Sold 23,000 31,000 $ 108,000 172,000 $ 280,000 The company's Accounting Department has prepared the following absorption costing income statements for July and August: July August $ 1,104,000 $ 1,488,000 529,000 713,000 575,000 218,000 775,000 234,000 $ 357,000 $ 541,000 2. Prepare variable costing income statements for July and August. 3. Reconcile the variable costing and absorption costing net operating incomes.

Name: Denton Company manufactures and sells a single product. Cost data for
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Description: Denton Company manufactures and sells a single product. Cost data for the product are given:Variable costs per unit:Direct materialsDirect laborVariable manufacturing overheadVariable selling and administrativeTotal variable cost per unitFixed costs

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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