Dowell Company produces a single product. Its Income under variable costing for its first two years of operation follow. Variable Costing Income Income Additional Information a. Sales and production data for these first two years follow. Units Units produced Units sold Year 1 44,300 33,000 Direct materials Direct labor Variable overhead Year 1 $ 43,000 Year 2 44,300 55,600 b. The company's $32 per unit product cost (for both years) using absorption costing consists of the following. Fixed overhead ($430,000/43,000 units) Total product cost per unit Year 2 $ 610,000 $6 9 7 10 $ 32 Required: Prepare a statement to convert variable costing income to absorption costing Income for both years. (Leave no cells blank - be certain to enter "0" wherever required.)
Dowell Company produces a single product. Its Income under variable costing for its first two years of operation follow. Variable Costing Income Income Additional Information a. Sales and production data for these first two years follow. Units Units produced Units sold Year 1 44,300 33,000 Direct materials Direct labor Variable overhead Year 1 $ 43,000 Year 2 44,300 55,600 b. The company's $32 per unit product cost (for both years) using absorption costing consists of the following. Fixed overhead ($430,000/43,000 units) Total product cost per unit Year 2 $ 610,000 $6 9 7 10 $ 32 Required: Prepare a statement to convert variable costing income to absorption costing Income for both years. (Leave no cells blank - be certain to enter "0" wherever required.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:Dowell Company produces a single product. Its Income under variable costing for its first two years of operation follow.
Variable Costing Income
Income
Units
Units produced
Units sold
Additional Information
a. Sales and production data for these first two years follow.
Year 1
$ 43,000
Year 1
44,300
33,000
Direct materials
Direct labor
Variable overhead
Fixed overhead ($430,000/43,000 units)
Total product cost per unit
Variable costing income
Year 2
b. The company's $32 per unit product cost (for both years) using absorption costing consists of the following.
Absorption costing income
44,300
55,600
Year 2
$ 610,000
Required:
Prepare a statement to convert variable costing income to absorption costing income for both years. (Leave no cells blank - be certain
to enter "0" wherever required.)
$6
Dowell Company
Convert Variable Costing Income to Absorption Costing Income
Year 1
$
9
7
10
$32
43,000 $
Year 2
610,000
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