During 2022, Blue Spruce Corp. produced 43,120 units and sold 43,120 for $14.00 per unit. Variable manufacturing costs were $5.00 per unit. Annual fixed manufacturing overhead was $86,240 ($2.00 per unit). Variable selling and administrative costs were $2.00 per unit sold, and fixed selling and administrative expenses were $21,560. Suppose the accountant for Blue SpruceCorp. uses normal-absorption costing and uses the budgeted volume of 53,900 units to allocate the fixed overhead rather than the actual production volume of 43,120 units. The company expenses production volume variance to cost of goods sold in the accounting period in which it occurs. (a) Calculate the manufacturing cost per unit. (Round answer to 2 decimal places, e.g. 5.25.) Manufacturing cost $enter the manufacturing cost per unit in dollars rounded to 2 decimal places per unit Prepare a normal-absorption-costing income statement for the first year of operation.
During 2022, Blue Spruce Corp. produced 43,120 units and sold 43,120 for $14.00 per unit. Variable manufacturing costs were $5.00 per unit. Annual fixed manufacturing overhead was $86,240 ($2.00 per unit). Variable selling and administrative costs were $2.00 per unit sold, and fixed selling and administrative expenses were $21,560. Suppose the accountant for Blue SpruceCorp. uses normal-absorption costing and uses the budgeted volume of 53,900 units to allocate the fixed overhead rather than the actual production volume of 43,120 units. The company expenses production volume variance to cost of goods sold in the accounting period in which it occurs. (a) Calculate the manufacturing cost per unit. (Round answer to 2 decimal places, e.g. 5.25.) Manufacturing cost $enter the manufacturing cost per unit in dollars rounded to 2 decimal places per unit Prepare a normal-absorption-costing income statement for the first year of operation.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
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:During 2022, Blue Spruce Corp. produced 43,120 units and sold 43,120 for $14.00 per unit. Variable manufacturing costs
were $5.00 per unit. Annual fixed manufacturing overhead was $86,240 ($2.00 per unit). Variable selling and
administrative costs were $2.00 per unit sold, and fixed selling and administrative expenses were $21,560. Suppose the
accountant for Blue SpruceCorp. uses normal-absorption costing and uses the budgeted volume of 53,900 units to
allocate the fixed overhead rather than the actual production volume of 43,120 units. The company expenses production
volume variance to cost of goods sold in the accounting period in which it occurs.
(a)
Calculate the manufacturing cost per unit. (Round answer to 2 decimal places, e.g. 5.25.)
Manufacturing cost Senter the manufacturing cost per unit in dollars rounded to 2 decimal places per unit
Prepare a normal-absorption-costing income statement for the first year of operation.
42
P
Blue SpruceCorp.
Income Statement-Normal-Absorption Costing
For the Year Ended December 31, 2022 +
+
+
$
$
11
$
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