Please do not give solution in image format thanku Mary is studying the working papers from her client's 2025 income statement because her manager wants her toreconstruct that same income statement without the benefit of first seeing the finished product. She knows theclient uses standard costing within its accounting system, but she has to figure out which inventory costing method ituses. The working paper shows the following details. No other variances were reported, and the prior year per-unitcosts were the same as the 2025 per-unit costs.Gross marginSales volumeBudgeted productionBeginning FG InventoryEnding FG InventoryFixed-MOH volume variance (unfavorable)Operating incomeSales$4,200180 units230 units30 units40 units$840$600$15,480 How much did the client capitalize into inventory on a per-unit basis?Inventory cost per unit $Your answer is incorrect.How many units did the client produce last year?Units producedYour answer is incorrect.If the client had used the other costing method (not the one determined in part (a)), how much income would it have reported lastyear?Operating income $

Under the standard costing system, the variances related to production costs are adjusted with the…

Answered: Gross margin Sales volume Budgeted…

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter2: Accounting For Materials

Section: Chapter Questions

Problem 2MC

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Sharon is studying the working papers from her client's 2025 income statement because her manager wants her to reconstruct that same income statement without the benefit of first seeing the finished product. She knows the client uses standard costing within its accounting system, but she has to figure out which inventory costing method it uses. The working paper shows the following details. No other variances were reported, and the prior year per-unit costs were the same as the 2025 per-unit costs. Gross margin Sales volume Budgeted production Beginning FG Inventory Ending FG Inventory Fixed-MOH volume variance (unfavorable) Operating income Sales (a1) ✓ Your answer is correct. (d) Absorption Costing eTextbook and Media Your answer is incorrect. Which inventory costing method did the client use in 2025, variable or absorption? $6,500 180 units Operating income $ 200 units eTextbook and Media 33 units Save for Later 36 units Show Transcribed Text $340 $570 $16.200 G If the client had…
Carol is studying the working papers from her client's 2025 income statement because her manager wants her to reconstruct that same income statement without the benefit of first seeing the finished product. She knows the client uses standard costing within its accounting system, but she has to figure out which inventory costing method it uses. The working paper shows the following details. No other variances were reported, and the prior year per-unit costs were the same as the 2025 per-unit costs. Gross margin Sales volume Budgeted production Beginning FG Inventory Ending FG Inventory Fixed-MOH volume variance (unfavorable) Operating income Sales $4,040 Absorption Costing 200 units 230 units 33 units 43 units $360 $640 $16,200 Which inventory costing method did the client use in 2025, variable or absorption? How much did the client capitalize into inventory on a per-unit basis? LA Inventory cost per unit $
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The May 2018 revenue and cost information for Boise Outfitters, Inc. follows: (Click the icon to view the revenue and cost information.) Prepare a standard cost income statement for management through gross profit. Report all standard cost variances for management's use. Has management done a good or poor job of controlling costs? Explain. (Use a minus sign or parentheses to enter any contra expenses. Enter all other amounts as positive numbers.) Boise Outfitters, Inc. - X Data table Standard Cost Income Statement For the Month Ended May 31, 2018 Sales Revenue (at standard) Cost of Goods Sold (at standard) Direct Materials Cost Variance Direct Materials Efficiency Variance Direct Labor Cost Variance Direct Labor Efficiency Variance Variable Overhead Cost Variance Variable Overhead Efficiency Variance Fixed Overhead Cost Variance Fixed Overhead Volume Variance Print Done Gross Profit $ 560,000 344,000 700 F 6,000 F 4,700 U 2,300 F 3,000 U 750 U 1,500 U 8,700 F
The May 2024 revenue and cost information for Boise Outfitters, Inc. follows: 1(Click the icon to view the revenue and cost information.) Prepare a standard cost income statement for management through gross profit. Report all standard cost variances for management's use. Has management done a good or poor job of controlling costs? Explain. (Use a minus sign or parentheses to enter any contra expenses. Enter all other amounts as positive numbers.) Boise Outfitters, Inc. Standard Cost Income Statement For the Month Ended May 31, 2024 (1) Sales Revenue $540,000 (2) Cost of Goods Sold at standard $344,000 (3) Manufacturing Cost Variances: (4) Direct Materials Cost Variance (5) Direct Materials Efficiency Variance (6) Direct Labor Cost Variance 4,800 (7) Direct Labor Efficiency Variance (8) Variable…
Situation Fenimore Manufacturing Company uses the average cost method. It has followed a policy of expensing all its manufacturing cost variances. It is considering a change in its policy that will involve allocating them between cost of goods sold and inventory. Fenimore’s president has asked you which of these alternative policies is consistent with GAAP. Directions Research the related generally accepted accounting principles and prepare a short memo to the president. Cite your references and applicable paragraph numbers.
Magic Me is a manufacturer of magic kits. It uses absorption costing based on standard costs and reports the following data for 2017: There are no price, spending, or efficiency variances. Actual operating costs equal budgeted operating costs. The production-volume variance is written off to cost of goods sold. For each choice of denominator level, the budgeted production cost per unit is also the cost per unit of beginning inventory Q. Prepare absorption costing–based income statements for Magic Me Corporation using theoretical capacity, practical capacity, and normal capacity utilization as the denominator levels.
The Alamo Company reports the actual data for 2023 and 2022. There are no price, efficiency or rate variances. Any production volume varlances are written off to Cost of Goods Sold in the year it occurs. Unit Data Beginning Inventory Production Budgeted Production Sales Variable costs Manufacturing cost per unit produced Operating (marketing) cost per unit sold Fixed costs Manufacturing costs Operating (marketing) costs Selling price per unit $ ss $ $ ss $ $ 2021 10 900 1,200 880 350 $ 40 $ 69,600 $ 8,400 $ 800 $ 2022 30 1,000 1,200 950 355 42 69,600 8,400 800 Required a. Prepare a statement of comprehensive income for each year using variable costing and absorption costing. b. Reconcile the difference between the operating incomes for each year; ensure to report the number of units for beginning and ending inventory for Fixed Manufacturing costs.
Did Blackstar have a favorable or unfavorable variable overhead spending variance during 2017?
Magic Me is a manufacturer of magic kits. It uses absorption costing based on standard costs and reports the following data for 2017: There are no price, spending, or efficiency variances. Actual operating costs equal budgeted operating costs. The production-volume variance is written off to cost of goods sold. For each choice of denominator level, the budgeted production cost per unit is also the cost per unit of beginning inventory Q. Why is the operating income under normal capacity utilization lower than the other two scenarios?

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Gross margin Sales volume Budgeted production Beginning FG Inventory Ending FG Inventory Fixed-MOH volume variance (unfavorable) Operating income Sales $4,200 180 units 230 units 30 units 40 units $840 $600 $15,480