During 2022, Bramble Corp. produced 39,120 units and sold 39,120 for $16.00 per unit. Variable manufacturing costs were $6.00 per unit. Annual fixed manufacturing overhead was $78,240 ($2.00 per unit). Variable selling and administrative costs were $2.00 per unit sold, and fixed selling and administrative expenses were $19,560. Suppose the accountant for Bramble Corp. uses normal-absorption costing and uses the budgeted volume of 48,900 units to allocate the fixed overhead rather than the actual production volume of 39,120 units. The company expenses production volume variance to cost of goods sold in the accounting period in which it occurs.
During 2022, Bramble Corp. produced 39,120 units and sold 39,120 for $16.00 per unit. Variable manufacturing costs were $6.00 per unit. Annual fixed manufacturing overhead was $78,240 ($2.00 per unit). Variable selling and administrative costs were $2.00 per unit sold, and fixed selling and administrative expenses were $19,560. Suppose the accountant for Bramble Corp. uses normal-absorption costing and uses the budgeted volume of 48,900 units to allocate the fixed overhead rather than the actual production volume of 39,120 units. The company expenses production volume variance to cost of goods sold in the accounting period in which it occurs.
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:(b)
Prepare a normal-absorption-costing income statement for the first year of operation.
Sales
Cost of goods sold
Beginning inventory
Add : Costs of goods manufactured
Less
Gross margin
Less :
Variable costs
BrambleCorp.
Income Statement-Normal-Absorption Costing
For the Year Ended December 31, 2022
Selling and administrative expenses
Operating income
$
LA
LA
+A
Transcribed Image Text:During 2022, Bramble Corp. produced 39,120 units and sold 39,120 for $16.00 per unit. Variable manufacturing costs were $6.00 per
unit. Annual fixed manufacturing overhead was $78,240 ($2.00 per unit). Variable selling and administrative costs were $2.00 per unit
sold, and fixed selling and administrative expenses were $19,560. Suppose the accountant for Bramble Corp. uses normal-absorption
costing and uses the budgeted volume of 48,900 units to allocate the fixed overhead rather than the actual production volume of
39,120 units. The company expenses production volume variance to cost of goods sold in the accounting period in which it occurs.
(a)
Your answer is correct.
Calculate the manufacturing cost per unit. (Round answer to 2 decimal places, e.g. 5.25.)
Manufacturing cost $
7.60
per unit
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