Easton Pump Company's planned production for the year just ended was 19,100 units. This production level was achieved, and 20,700units were sold. Other data follow:Direct material usedDirect labor incurredFixed manufacturing overheadVariable manufacturing overheadFixed selling and administrative expensesVariable selling and administrative expensesFinished-goods inventory, January 1$592,100286,500403,010177,630345,710106,0052,200 unitsThe cost per unit remained the same in the current year as in the previous year. There were no work-in-process inventories at thebeginning or end of the year.Required:1. What would be Easton Pump Company's finished-goods inventory cost on December 31 under the variable-costing method? (Do notround intermediate calculations.)2-a. Which costing method, absorption or variable costing, would show a higher operating income for the year?2-b. By what amount? (Do not round intermediate calculations.)

●1. Answer: Production cost per unit under variable costing method= (Direct material+ Direct labor+…

Answered: Easton Pump Company's planned…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Sims Company began operations on January 1. Its cost and sales information for this year follow. Direct materials $ 40 per unit Direct labor $ 60 per unit Variable overhead $ 40 per unit Fixed overhead $ 6,600,000 per year Variable selling and administrative expenses $ 11 per unit Fixed selling and administrative expenses $ 4,000,000 per year Units produced 110,000 units Units sold 80,000 units Sales price $ 360 per unit 1. Prepare an income statement for the year using variable costing.2. Prepare an income statement for the year using absorption costing.
Prior to the first month of operations ending October 31, Marshall Inc. estimated the following operating results: Sales (19,200 x $68) $1,305,600 Manufacturing costs (19,200 units): Direct materials 787,200 Direct labor 186,240 Variable factory overhead 86,400 Fixed factory overhead 103,680 Fixed selling and administrative expenses 28,200 Variable selling and administrative expenses 34,100 The company is evaluating a proposal to manufacture 21,600 units instead of 19,200 units, thus creating an ending inventory of 2,400 units. Manufacturing the additional units will not change sales, unit variable factory overhead costs, total fixed factory overhead cost, or total selling and administrative expenses. Question Content Area a. 1. Prepare an estimated income statement, comparing operating results if 19,200 and 21,600 units are manufactured in the absorption costing format. If an amount box does not require an entry leave it blank. Marshall…
Prior to the first month of operations ending October 31, Marshall Inc. estimated the following operating results: 1 Sales (28,800 × $75) $2,160,000.00 2 Manufacturing costs (28,800 units): 3 Direct materials 1,209,600.00 4 Direct labor 316,800.00 5 Variable factory overhead 115,200.00 6 Fixed factory overhead 221,760.00 7 Fixed selling and administrative expenses 28,400.00 8 Variable selling and administrative expenses 34,900.00 The company is evaluating a proposal to manufacture 36,000 units instead of 28,800 units, thus creating an ending inventory of 7,200 units. Manufacturing the additional units will not change sales, unit variable factory overhead costs, total fixed factory overhead cost, or total selling and administrative expenses. Required: a. Prepare an estimated income statement, comparing operating results if 28,800 and 36,000 units are manufactured in (1) the absorption costing…
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At the end of the first year of operations, 5,600 units remained in the finished goods inventory. The unit manufacturing costs during the year were as follows: Direct materials $29.10 Direct labor 13.20 Fixed factory overhead 4.80 Variable factory overhead 4.20 Determine the cost of the finished goods inventory reported on the balance sheet under (a) the absorption costing concept and (b) the variable costing concept. Absorption costing $ Variable costing $
Mahoko PLC's planned production for the year just ended was 18,400 units. This production level was achieved, and 21,200 units were sold. Other data follow: Direct material used $ 552,000 Direct labor incurred 259,440 Fixed manufacturing overhead 390,080 Variable manufacturing overhead 198,720 Fixed selling and administrative expenses 329,360 Variable selling and administrative expenses 100,280 Finished-goods inventory, January 1 3,500 units The cost per unit remained the same in the current year as in the previous year. There were no work-in-process inventories at the beginning or end of the year. Required: 1. What would be Mahoko PLC’s finished-goods inventory cost on December 31 under the variable-costing method? Note: Do not round intermediate calculations. 2-a. Which costing method, absorption or variable costing, would show a higher operating income for the year? 2-b. By what amount?
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Aces Incorporated, a manufacturer of tennis rackets, began operations this year. The company produced 5,600 rackets and sold 4,500. Each racket was sold at a price of $86. Fixed overhead costs are $70,560 for the year, and fixed selling and administrative costs are $64,800 for the year. The company also reports the following per unit variable costs for the year: Direct materials Direct labor Variable overhead Variable selling and administrative expenses Required: Prepare an income statement under absorption costing. ACES INCORPORATED Income Statement (Absorption Costing) Sales Cost of goods sold Gross profit Selling and administrative expenses Income $ $ 387,000 387,000 $ 387,000 $ 11.88 7.88 4.84 1.60
Krepps Corporation produces a single product. Last year, Krepps manufactured 34,250 units and sold 28,800 units. Production costs for the year were as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Sales totaled $1,434,200 for the year, variable selling and administrative expenses totaled $167,560, and fixed selling and administrative expenses totaled $215,775. There was no beginning inventory. Assume that direct labor is a variable cost. Under variable costing, the company's net operating income for the year would be: Multiple Choice O $103,550 lower than under absorption costing. O $111,150 lower than under absorption costing. $103,550 higher than under absorption costing. $ 284,275 $ 140,425 $ 256,875 $ 650,750 $111,150 higher than under absorption costing.
Sims Company began operations on January 1. Its cost and sales information for this year follow. $ 30 per unit $ 50 per unit $ 40 per unit Direct materials Direct labor Variable overhead Fixed overhead Variable selling and administrative expenses Fixed selling and administrative expenses Units produced Units sold Sales price $ 6,000,000 per year $ 11 per unit $ 4,000,000 per year 100,000 units 70,000 units $360 per unit 1. Prepare an income statement for the year using variable costing. 2. Prepare an income statement for the year using absorption costing, Complete this question by entering your answers in the tabs below. Required 1 Required 2

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