Dowell Company produces a single product. Its income under variable costing for its first two years of operation follow. Variable Costing Income Year 1 Year 2 Income $ 50,000 $ 680,000 Additional Information Sales and production data for these first two years follow. Units Year 1 Year 2 Units produced 52,000 52,000 Units sold 40,000 64,000 The company’s $33 per unit product cost (for both years) using absorption costing consists of the following. Direct materials $ 6 Direct labor 9 Variable overhead 8 Fixed overhead ($500,000/50,000 units) 10 Total product cost per unit $ 33 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 Year 1 Year 2 Income $ 50,000 $ 680,000 Additional Information Sales and production data for these first two years follow. Units Year 1 Year 2 Units produced 52,000 52,000 Units sold 40,000 64,000 The company’s $33 per unit product cost (for both years) using absorption costing consists of the following. Direct materials $ 6 Direct labor 9 Variable overhead 8 Fixed overhead ($500,000/50,000 units) 10 Total product cost per unit $ 33 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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Dowell Company produces a single product. Its income under variable costing for its first two years of operation follow.
| Variable Costing Income | Year 1 | Year 2 |
|---|---|---|
| Income | $ 50,000 | $ 680,000 |
Additional Information
Sales and production data for these first two years follow.
| Units | Year 1 | Year 2 |
|---|---|---|
| Units produced | 52,000 | 52,000 |
| Units sold | 40,000 | 64,000 |
The company’s $33 per unit product cost (for both years) using absorption costing consists of the following.
| Direct materials | $ 6 |
|---|---|
| Direct labor | 9 |
| Variable |
8 |
| Fixed overhead ($500,000/50,000 units) | 10 |
| Total product cost per unit | $ 33 |
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.)
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