Excrcise 3 (Variable Costing Unit Product Cost and Income Statement; Break-even) PC Desk, Inc., makes an oak desk specially designed for personal computers. The desk sells for P2,000. Data for last year's operations follow: Units in beginning inventory. Units produced.. Units sold.. Units in ending inventory. 10,000 9,000 1,000 Variable costs per unit: Direct materials.. P 600 300 Direct labor . Variable manufacturing overhead.. Variable selling and administrative Total variable cost per unit.. 100 200 P1,200 Fixed costs: Fixed manufacturing overhead Fixed selling and administrative. Total fixed costs... P3,000,000 4,500,000 P7,500,000 Required: 1. Assume that the company uses variable costing. Compute the unit produc cost for one computer desk. 2. Assume that the company uses variable costing. Prepare an income statement for the year using the contribution format. 3, What is the company's break-even point in terms of units sold?

Excrcise 3 (Variable Costing Unit Product Cost and Income Statement; Break-even) PC Desk, Inc., makes an oak desk specially designed for personal computers. The desk sells for P2,000. Data for last year's operations follow: Units in beginning inventory. Units produced.. Units sold.. Units in ending inventory. 10,000 9,000 1,000 Variable costs per unit: Direct materials.. P 600 300 Direct labor . Variable manufacturing overhead.. Variable selling and administrative Total variable cost per unit.. 100 200 P1,200 Fixed costs: Fixed manufacturing overhead Fixed selling and administrative. Total fixed costs... P3,000,000 4,500,000 P7,500,000 Required: 1. Assume that the company uses variable costing. Compute the unit produc cost for one computer desk. 2. Assume that the company uses variable costing. Prepare an income statement for the year using the contribution format. 3, What is the company's break-even point in terms of units sold?

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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! Required information [The following information applies to the questions displayed below.] Chuck Wagon Grills, Incorporated, makes a single product-a handmade specialty barbecue grill that it sells for $210. Data for last year's operations follow: Units in beginning inventory Units produced Units sold Units in ending inventory Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Total variable cost per unit Fixed costs: Fixed manufacturing overhead Fixed selling and administrative Total fixed costs 0 20,000 19,000 1,000 $ 50 80 20 10 $ 160 $ 700,000 285,000 $ 985,000 Required: 1. Assume that the company uses absorption costing. Compute the unit product cost for one barbecue grill. 2. Assume that the company uses absorption costing. Prepare an income statement for last year.
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The Bedou - Kwaku Company produces and sells only one product Product J-99. Bedou - Kwaku Company's data for the current year are Sales revenue (25,000 units )......$225,000 Costs Variable costs..........$117,000 Fixed costs .........$38,400 Total costs.........$155,400 Net income.........$ 69,600 What is Bedou - Kwaku Company's break -even point in sales dollars ? (ignore income taxes ) $ 8,889 $117,000 $ 155,400 $ 80,000 $69,600
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PROBLEM 4- Betty, Inc., incurs the following costs to produce and sell a single product. Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative expenses Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses P10 P5 P2 P4 P90,000 P300,000 During the last year, 30,000 units were produced and 25,000 units were sold. The Finished Goods inventory account at the end of the year shows a balance of P85,000 for the 5,000 unsold units. Required: 1. Is the company using absorption costing or variable costing to cost units in the Finished Goods inventory account? Show computations to support your answer. 2. Assume that the company wishes to prepare financial statements for the year to issue to its stockholders. a. Is the P85,000 figure for Finished Goods inventory the correct amount to use on these statements for external reporting purposes? Explain. b. At what dollar amount should the 5,000…
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