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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The accounting records for Portland Products report the following manufacturing costs for the past year. Direct materials $ 390,000 Direct labor 262,000 Variable overhead 231,000 Production was 170,000 units. Fixed manufacturing overhead was $860,000. For the coming year, costs are expected to increase as follows: direct materials costs by 20 percent, excluding any effect of volume changes; direct labor by 4 percent; and fixed manufacturing overhead by 10 percent. Variable manufacturing overhead per unit is expected to remain the same. Required A: Prepare a cost estimate for a volume level of 136,000 units of product this year. (Do not round intermediate calculations.) Cost Item This Year’s cost Direct materials _______________ Direct labor…
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vy, Inc., produces a single product that sells for $60 per unit. There were no inventories of work in process or finished goods. Costs for the year were as follows: Variable costs: Direct materials Direct labor Manufacturing overhead Selling expenses Fixed costs Manufacturing overhead Selling and administrative During the first three months of the year, production and sales in units were as follows: Production Sales January February March 4,000 4,000 4,000 b. $8 per unit $12 per unit $5 per unit $3 per unit $36,000 per month $15,000 per month 4,000 3,500 4,500 The company uses an actual cost system. There were no work-in-process inventories at the end of any month. Required: a. Determine the unit cost of production under variable costing and absorption costing for the Feb & March months. Determine income under variable and absorption costing for Feb & March months
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Aces Incorporated, a manufacturer of tennis rackets, began operations this year. The company produced 5,800 rackets and sold 4,700. Each racket was sold at a price of $88. Fixed overhead costs are $74,240 for the year, and fixed selling and administrative costs are $65,000 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 variable costing. $ 11.94 7.94 4.92 1.80
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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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