Inventories: Beginning (units) Ending (units) Variable costing net operating income 200 170 170 180 $ 1,080,400 $ 1,032,400 The company's fixed manufacturing overhead per unit was constant at $560 for all three years.

Inventories: Beginning (units) Ending (units) Variable costing net operating income 200 170 170 180 $ 1,080,400 $ 1,032,400 The company's fixed manufacturing overhead per unit was constant at $560 for all three years.

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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Cool Sky reports the following for its first year of operations. The company produced 42,000 units and sold 34,000 units at a price of $150 per unit. Direct materials $ 66 per unit Direct labor $ 25 per unit Variable overhead $ 9 per unit Fixed overhead $ 546,000 per year Variable selling and administrative expenses $ 10 per unit Fixed selling and administrative expenses $ 105,000 per year Exercise 19-3 (Algo) Part 2b 2b. Assume the company uses variable costing. Prepare its income statement for the year under variable costing.
Prior to the first month of operations ending October 31, Marshall Inc. estimated the following operating results: 1 Sales (28,800 × $75) $2,160,000.00 2 Manufacturing costs (28,800 units): 3 Direct materials 1,209,600.00 4 Direct labor 316,800.00 5 Variable factory overhead 115,200.00 6 Fixed factory overhead 221,760.00 7 Fixed selling and administrative expenses 28,400.00 8 Variable selling and administrative expenses 34,900.00 The company is evaluating a proposal to manufacture 36,000 units instead of 28,800 units, thus creating an ending inventory of 7,200 units. Manufacturing the additional units will not change sales, unit variable factory overhead costs, total fixed factory overhead cost, or total selling and administrative expenses. Required: a. Prepare an estimated income statement, comparing operating results if 28,800 and 36,000 units are manufactured in (1) the absorption costing…
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Mahoko PLC's planned production for the year just ended was 18,400 units. This production level was achieved, and 21,200 units were sold. Other data follow: Direct material used $ 552,000 Direct labor incurred 259,440 Fixed manufacturing overhead 390,080 Variable manufacturing overhead 198,720 Fixed selling and administrative expenses 329,360 Variable selling and administrative expenses 100,280 Finished-goods inventory, January 1 3,500 units The cost per unit remained the same in the current year as in the previous year. There were no work-in-process inventories at the beginning or end of the year. Required: 1. What would be Mahoko PLC’s finished-goods inventory cost on December 31 under the variable-costing method? Note: Do not round 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?
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Dowell Company produces a single product. Its Income under variable costing for its first two years of operation follow. Variable Costing Income Income Units Units produced Units sold Additional Information a. Sales and production data for these first two years follow. Year 1 $ 43,000 Year 1 44,300 33,000 Direct materials Direct labor Variable overhead Fixed overhead ($430,000/43,000 units) Total product cost per unit Variable costing income Year 2 b. The company's $32 per unit product cost (for both years) using absorption costing consists of the following. Absorption costing income 44,300 55,600 Year 2 $ 610,000 Required: Prepare a statement to convert variable costing income to absorption costing income for both years. (Leave no cells blank - be certain to enter "0" wherever required.) $6 Dowell Company Convert Variable Costing Income to Absorption Costing Income Year 1 $ 9 7 10 $32 43,000 $ Year 2 610,000
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All information included
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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