During 2022, Bridgeport Corp. produced 35,910 units and sold 35,910 for $14.00 per unit. Variable manufacturing costs were $5.00 per unit. Annual fixed manufacturing overhead was $71,820 ($2.00 per unit). Variable selling and administrative costs were $2.00 per unit sold, and fixed selling and administrative expenses were $30,780. Suppose the accountant for Bridgeport Corp. uses normal- absorption costing and uses the budgeted volume of 51,300 units to allocate the fixed overhead rather than the actual production volume of 35,910 units. The company expenses production volume variance to cost of goods sold in the accounting period in which it occurs. (a)
During 2022, Bridgeport Corp. produced 35,910 units and sold 35,910 for $14.00 per unit. Variable manufacturing costs were $5.00 per unit. Annual fixed manufacturing overhead was $71,820 ($2.00 per unit). Variable selling and administrative costs were $2.00 per unit sold, and fixed selling and administrative expenses were $30,780. Suppose the accountant for Bridgeport Corp. uses normal- absorption costing and uses the budgeted volume of 51,300 units to allocate the fixed overhead rather than the actual production volume of 35,910 units. The company expenses production volume variance to cost of goods sold in the accounting period in which it occurs. (a)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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:Prepare a normal-absorption-costing income statement for the first year of operation.
Sales
Variable costs
Fixed costs
Add: Cost of goods sold
BridgeportCorp.
Income Statement-Normal-Absorption Costing
For the Year Ended December 31, 2022
LA
LA
$
69
502740
Transcribed Image Text:During 2022, Bridgeport Corp. produced 35,910 units and sold 35,910 for $14.00 per unit. Variable manufacturing costs were $5.00
per unit. Annual fixed manufacturing overhead was $71,820 ($2.00 per unit). Variable selling and administrative costs were $2.00 per
unit sold, and fixed selling and administrative expenses were $30,780. Suppose the accountant for Bridgeport Corp. uses normal-
absorption costing and uses the budgeted volume of 51,300 units to allocate the fixed overhead rather than the actual production
volume of 35,910 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 $
eTextbook and Media
per unit
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