Exercise 19-5 Absorption costing and variable costing income statements LO P2Rey Company's single product sells at a price of $217 per unit. Data for its single product for its first year of operations follow.Direct materialsDirect laborOverhead costsVariable overheadFixed overhead per yearSelling and administrative expensesVariableFixedUnits produced and sold$21 per unit$29 per unit$7 per unit$ 189,000 per year$19 per unit$ 202,000 per year21,000 units1. Prepare an income statement for the year using absorption costing2. Prepare an income statement for the year using variable costing.Complete this question by entering your answers in the tabs below.Required 1 Required 2Prepare an income statement for the year using variable costing.REY COMPANYVariable Costing Income Statement00Net income (loss)< Required 1Required 2 >

Absorption costing means where inventory is valued at total manufacturing cost.. Variable costing…

Answered: Exercise 19-5 Absorption costing and…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Exercise 12-12A (Algo) How the allocation of fixed cost affects a pricing decision LO 12-3 Jordan Manufacturing Co. expects to make 31,000 chairs during the year 1 accounting period. The company made 4,100 chairs in January. Materials and labor costs for January were $17,600 and $24,700, respectively. Jordan produced 1,100 chairs in February. Material and labor costs for February were $9,500 and $12,300, respectively. The company paid the $775,000 annual rental fee on its manufacturing facility on January 1, year 1. The rental fee is allocated based on the total estimated number of units to be produced during the year. Required Assuming that Jordan desires to sell its chairs for cost plus 25 percent of cost, what price should be charged for the chairs produced in January and February? (Round intermediate calculations and final answers to 2 decimal places.) Price per unit January February
es aw 11 Whitman Company has just completed its first year of operations. The company's absorption costing income statement for the year follows: f₂ Sales (40,000 units x $42.60 per unit) Cost of goods sold (40,000 units x $22 per unit) Gross margin Selling and administrative expenses Net operating income Direct materials Direct labor The company's selling and administrative expenses consist of $300,000 per year in fixed expenses and $5 per unit sold in variable expenses. The $22 unit product cost given above is computed as follows: Variable manufacturing overhead Fixed manufacturing overhead ($230,000 + 46,000 units) Absorption costing unit product cost Whitman Company Income Statement, Required 1 Required 2 Required: 1. Redo the company's income statement in the contribution format using variable costing. 2. Reconcile any difference between the net operating income on your variable costing income statement and the net operating income on the absorption costing income statement above.…
%24 Kesterson Corporation has provided the following information: Cost Cost per Period per Unit $7.20 $4.30 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Sales commissions Variable administrative expense Fixed selling and administrative expense 09 $2.20 $0.50 If 7,500 units are produced, the total amount of indirect manufacturing cost incurred is closest to: Multiple Cholce $12,000 O $36.750 re to search F4 F5 F7 F8 F10 てい1 Coca %23 V
TF 3 The following data was prepared by the Oriole Company. Total Variable Fixed Sales price $22/unit Direct materials used $82,650 Direct labor $96,000 Manufacturing overhead $113,670 $17,910 $95,760 Selling and administrative expense $22,700 $13,100 $9,600 Units manufactured 25,200 units Beginning Finished Goods Inventory 19,200 units Ending Finished Goods Inventory 7,000 units Cost of goods sold $ Under variable costing, what is the cost of goods sold? (Round cost per unit to 2 decimal places, e.g. 2.52 and final answer to 0 decimal place, e.g. 2,152.) Cost of goods sold$ Under absorption costing, what is the operating income? (Round cost per unit to 2 decimal places, e.g. 2.52 and final answer to 0 decimal place, e.g. 2,152.) Operating income $ Under variable costing, what is the operating income? (Round cost per unit to 2 decimal places, e.g. 2.52 and…
Exercise 19-15 (Algo) Absorption costing and overproduction LO C1 A manufacturer reports direct materials of $6 per unit, direct labor of $3 per unit, and variable overhead of $5 per unit. Fixed overhead Is $156,000 per year, and the company estimates sales of 15,600 units at a sales price of $26 per unit for the year. The company has no beginning finished goods inventory. 1. If the company uses absorption costing, compute gross profit assuming (a) 15,600 units are produced and 15,600 units are sold and (b) 19,500 units are produced and 15,600 units are sold. 2. If the company uses variable costing, how much would contribution margin differ if the company produced 19,500 units instead of producing 15,600? Assume the company sells 15,600 units. Hint: Calculations are not required. Complete this question by entering your answers in the tabs below. Required 1 Required 2 If the company uses absorption costing, compute gross profit assuming (a) 15,600 units are produced and 15,600 units are…
Average Cost per Unit $ 7.00 $ 4.00 $ 1.50 $ 5.00 $ 3.50 $ 2.50 $ 1.00 $ 0.50 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense Required: 1. For financial accounting purposes, what is the total amount of product costs incurred to make 20,000 units? 2. For financial accounting purposes, what is the total amount of perlod costs incurred to sell 20,000 units? 3. For financial accounting purposes, what is the total amount of product costs incurred to make 22,000 units? 4. For financial accounting purposes, what is the total amount of period costs incurred to sell 18,000 units? 1. Total amount of product costs 2. Total amount of period costs incurred 3. Total amount of product costs 4. Total amount of period costs
EX 20-3 Income statements under absorption costing and variable costing Obj. 1 Joplin Industries Inc. manufactures and sells high-quality sporting goods equipment under its highly recognizable J-Sports logo. The company began operations on May 1 and operated at 100% of capacity (270,000 units) during the first month, creating an ending inventory of 24,000 units. During June, the company produced 246,000 garments during the month but sold 270,000 units at $300 per unit. The June manufacturing costs and selling and administrative expenses were as follows: Number of Units Unit Cost Total Cost Manufacturing costs in June 1 beginning inventory: Variable. 24,000 $150.00 $ 3,600,000 Fixed 24,000 32.80 787,200 Total $182.80 $ 4,387,200 Manufacturing costs in June: Variable... 246,000 $150.00 $36,900,000 Fixed 246,000 36.00 8,856,000 Total $186.00 $45,756,000 Selling and administrative expenses in June: Variable 270,000 $ 45.00 $12,150,000 Fixed 270,000 3.60 972,000 Total $ 48.60 $13,122,000 A.…
1 of 12 Assignment: 1 Case: 1 The Cost Sheet of a product is given as under: Direct Materials Direct Wages Factory Overheads: Fixed Variable Administrative Expenses: Selling and Distribution Overheads: Fixed Variable Total OMR 6.00 3.00 0.50 0.50 0.75 0.25 0.50 11.50 The selling price per unit is OMR 13. The above figures are for an output of 85,000 units, the capacity of the firm is 100,000 units. A foreign customer is desirous of buying 15,000 units at a price of OMR 10.50 per unit. (A) Advise the manufacturer, whether the order should be accepted. (B) What will be your advice, if the orders were from a local merchant, at the same price? (C) What would be the profits, if the local selling price falls to OMR 11 from OMR 13, after acceptance of the order from a local merchant?
Question 20 Bell Company sells several products. Information of average revenue and costs is as follows: Selling price per unit $33.00 Variable costs per unit. Direct material $6.00 Direct manufacturing labor $1.50 $0.25 Manufacturing overhead Selling costs $2.00 Annual fixed costs $111,000 The company sells 12,000 units. The contribution margin per unit is $23.25 $25.50 $14.00 $25.25
Question Two Pass-Well Company Limited produces a product that passes through two processes, Process 1 and Process 2. Details of activities for the month of December, 2020 is as follows; Process 1 @GH₵200.00 200hrs 3,500units GH₵20 per unit Process 2 GH₵25,000.00 600hrs 3,150units GH₵40 per unit a. You are required to prepare the relevant accounts b. You are required to prepare the relevant Accounts With practical example, differentiate between cost assignment and cost apportionment; product cost and period costs; direct Material introduced (4,000 units) Material added Labour Costs (@GH₵400 per hour) Output in units Scrap value of normal loss Note; i. Overhead is absorbed at 80% of labour costs. ii. Normal loss is estimated at 10% for both process. iii. No opening and closing stocks cost and indirect cost
Exercise 7-14 Variable Costing Unit Product Cost and Income Statement; Break-Even Analysis [LO7-1, LO7-2] Chuck Wagon Grills, Inc., makes a single product-a handmade specialty barbecue grill that it sells for $200. Data for last year's operations follow: Units in beginning inventory Units produced Units sold Units in ending inventory Variable costs per unit: Direct materials 9,500 8,700 800 24 80 20 10 30 Direct labor Variable manufacturing overhead Variable selling and administrative 2$ Total variable cost per unit 140 Fixed costs: Fixed manufacturing overhead Fixed selling and administrative $ 170,000 160,000 $ 330,000 Total fixed costs Required: 1. Assume that the company uses variable costing. Compute the unit product cost for one barbecue grill. 2. Assume that the company uses variable costing. Prepare a contribution format income statement for last year. 3. What is the company's break-even point in terms of the number of barbecue grills sold? Complete this question by entering…
EXERCISE 1-7 Direct and Indirect Costs L01-1 2.000.81 10 Kubin Company's relevant range of production is 18,000 to 22,000 units. When it produces and sells 20,000 units, its average costs per unit are as follows: Juris Required: 1. 2. 3. 4. a. b. a. b. the Untus ha babubong asin Direct materials.. Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense.. Sales commissions...... Variable administrative expense. b. Average Cost per Unit $7.00 $4.00 $1.50 $5.00 $3.50 $2.50 $1.00 $0.50 Assume the cost object is units of production: What is the total direct manufacturing cost incurred to make 20,000 units? What is the total indirect manufacturing cost incurred to make 20,000 units? Assume the cost object is the Manufacturing Department and that its total output is 20,000 units. How much total manufacturing cost is directly traceable to the Manufacturing Department? How much total manufacturing cost is an indirect cost that…

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