Ida Company produces a handcrafted musical instrument called a gamelan that is similar to a xylophone. The gamelans are sold for$870. Selected data for the company's operations last year follow:Units in beginning inventoryUnits producedUnits soldUnits in ending inventoryVariable costs per unit:Direct materialsDirect laborVariable manufacturing overheadVariable selling and administrativeFixed costs:Fixed manufacturing overheadFixed selling and administrativeSalesCost of goods soldGross marginSelling and administrative expenseNet operating income026023030$ 65,000$ 21,000The absorption costing income statement prepared by the company's accountant for last year appears below:$ 200, 100166, 75033,35024,450$ 8,900$105$325$45$ 15Required:1. Under absorption costing, how much fixed manufacturing overhead cost is included in the company's inventory at the end of lastyear?2. Prepare an income statement for last year using variable costing. During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows:Sales (@ $63 per unit)Cost of goods sold (@ $40 per unit)Gross marginSelling and administrative expenses*Net operating income*$3 per unit variable; $251,000 fixed each year.The company's $40 unit product cost is computed as follows:Direct materialsDirect laborVariable manufacturing overheadFixed manufacturing overhead ($432,000 ÷ 24,000 units)Absorption costing unit product costProduction and cost data for the first two years of operations are:Units producedUnits soldYear 124,00019,000Year 224,00029,000Year 1Year 2$ 1,197,000 $ 1,827,0001,160,000$711418$ 40760,000437,000308,000$ 129,000667,000338,000$ 329,000Required:1. Using variable costing, what is the unit product cost for both years?2. What is the variable costing net operating income in Year 1 and in Year 2?3. Reconcile the absorption costing and the variable costing net operating income figures for each year.

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Ida Company produces a handcrafted musical instrument called a gamelan that is similar to a xylophone. The gamelans are sold for $870. Selected data for the company's operations last year 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 Fixed costs: Fixed manufacturing overhead Fixed selling and administrative 0 260 230 30 Sales Cost of goods sold Gross margin Selling and administrative expense Net operating income $105 $325 $45 $15 $ 65,000 $ 21,000 The absorption costing income statement prepared by the company's accountant for last year appears below: $ 200, 100 166, 750 33,350 24, 450 $ 8,900 Required: 1. Under absorption costing, how much fixed manufacturing overhead cost is included in the company's inventory at the end of last year? 2. Prepare an income statement for last year using variable costing.

Ida Company produces a handcrafted musical instrument called a gamelan that is similar to a xylophone. The gamelans are sold for $870. Selected data for the company's operations last year 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 Fixed costs: Fixed manufacturing overhead Fixed selling and administrative 0 260 230 30 Sales Cost of goods sold Gross margin Selling and administrative expense Net operating income $105 $325 $45 $15 $ 65,000 $ 21,000 The absorption costing income statement prepared by the company's accountant for last year appears below: $ 200, 100 166, 750 33,350 24, 450 $ 8,900 Required: 1. Under absorption costing, how much fixed manufacturing overhead cost is included in the company's inventory at the end of last year? 2. Prepare an income statement for last year using variable costing.

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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ces Ida Company produces a handcrafted musical instrument called a gamelan that is similar to a xylophone. The gamelans are sold for $936. Selected data for the company's operations last year 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 Fixed costs: Fixed manufacturing overhead Fixed selling and administrative 1. Absorption costing unit product cost 2. Variable costing unit product cost + 0 19,000 17,000 2,000 Required: 1. Assume that the company uses absorption costing. Compute the unit product cost for one gamelan. (Round your intermediate calculations and final answer to the nearest whole dollar amount.) 2. Assume that the company uses variable costing. Compute the unit product cost for one gamelan. $ 200 $ 500 $58 $19 $ 720,000 $920,000
Ida Company produces a handcrafted musical Instrument called a gamelan that is similar to a xylophone. The gamelans are sold for $850. Selected data for the company's operations last year 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 Fixed costs: Fixed manufacturing overhead Fixed selling and administrative 250 225 25 $ 100 $ 320 $ 40 $ 20 $ 60,000 $ 20,000 The absorption costing Income statement prepared by the company's accountant for last year appears below. Sales Cost of goods sold Gross margin $ 191,250 157,500 33,750 Selling and administrative expense 24,500 $ 9,250 Net operating income Required: 1. Under absorption costing, how much fixed manufacturing overhead cost is included in the company's Inventory at the end of last year? 2. Prepare an income statement for last year using variable costing. Complete this…
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Ida Company produces a handcrafted musical instrument called a gamelan that is similar to a xylophone. The gamelans are sold for $900. Selected data for the company's operations last year 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 Fixed costs: Fixed manufacturing overhead Fixed selling and administrative 25,000 22,000 3,000 1. Absorption costing unit product cost 2. Variable costing unit product cost $ 220 $460 $ 51 $20 $720,000 $ 600,000 Required: 1. Assume that the company uses absorption costing. Compute the unit product cost for one gamelan. (Round your intermediate calculations and final answer to the nearest whole dollar amount.) 2. Assume that the company uses variable costing. Compute the unit product cost for one gamelan.
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22. Subject :- Accounting