Homework Help is Here – Start Your Trial Now!
Business
Accounting
Laura Hall, CEO of Wildhorse Industries, is concerned about the recent volatility in the company's operating income. She believes that since the number of units sold has been fairly stable over the past three years that operating income also should have been stable. Laura asked Kevin Allen, Wildhorse's inventory manager, to help her understand the issue. Kevin reviewed the company's records and compiled the following changes to Finished Goods Inventory (in units) for the years 2019, 2020, and 2021. Beginning inventory Production Sales Ending Inventory 2019 1,000 40,000 (39,000) 2,000 Year 2020 2,000 38,000 (39,500) 500 2021 500 40,000 (39.500) 1,000 Kevin also gathered the 2019 Income statements prepared using absorption costing and variable costing, which follow Income Statement-Absorption Costing Sales Cost of goods sold Units in beginning inventory Units sold from current year production Total cost of roods sold $ 5,655,000 (93,000) (3,534,000) 13.627.0001

Laura Hall, CEO of Wildhorse Industries, is concerned about the recent volatility in the company's operating income. She believes that since the number of units sold has been fairly stable over the past three years that operating income also should have been stable. Laura asked Kevin Allen, Wildhorse's inventory manager, to help her understand the issue. Kevin reviewed the company's records and compiled the following changes to Finished Goods Inventory (in units) for the years 2019, 2020, and 2021. Beginning inventory Production Sales Ending Inventory 2019 1,000 40,000 (39,000) 2,000 Year 2020 2,000 38,000 (39,500) 500 2021 500 40,000 (39.500) 1,000 Kevin also gathered the 2019 Income statements prepared using absorption costing and variable costing, which follow Income Statement-Absorption Costing Sales Cost of goods sold Units in beginning inventory Units sold from current year production Total cost of roods sold $ 5,655,000 (93,000) (3,534,000) 13.627.0001

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question


please answer within the format by providing formula the detailed working
Please provide answer in text (Without image)
Please provide answer in text (Without image)
Please provide answer in text (Without image)

Total cost of goods sold Gross margin Selling expense Operating Income Income Statement-Variable Costing Sales Variable production expenses Variable selling expenses Contribution margin Fixed manufacturing expenses Fixed selling expenses Operating income (a) Compute the unit product cost for 2019, 2020, and 2021 for variable and absorption costing. Assume that variable costs per unit and total fixed costs do not change from one year to the next. (Round answers to 2 decimal places, eg 15.25) Unit product cost using variable costing Compute the unit product cost for 2019, 2020, and 2021 for variable and absorption costing. Assume that variable costs per unit and total fixed costs do not change from one year to the next. (Round answers to 2 decimal places, e.g. 15.25.) Unit product cost using absorption costing (3,627,000) 2,028,000 (630,000) $ 1,398,000 eTextbook and Media 5,655,000 (2,145,000) (273,000) 3,237,000 (1.520,000) (357,000) 1.360,000 Save for Later 2019 2020 Attempts: 0 of 3 used 2021 Submit Answer
Transcribed Image Text:Total cost of goods sold Gross margin Selling expense Operating Income Income Statement-Variable Costing Sales Variable production expenses Variable selling expenses Contribution margin Fixed manufacturing expenses Fixed selling expenses Operating income (a) Compute the unit product cost for 2019, 2020, and 2021 for variable and absorption costing. Assume that variable costs per unit and total fixed costs do not change from one year to the next. (Round answers to 2 decimal places, eg 15.25) Unit product cost using variable costing Compute the unit product cost for 2019, 2020, and 2021 for variable and absorption costing. Assume that variable costs per unit and total fixed costs do not change from one year to the next. (Round answers to 2 decimal places, e.g. 15.25.) Unit product cost using absorption costing (3,627,000) 2,028,000 (630,000) $ 1,398,000 eTextbook and Media 5,655,000 (2,145,000) (273,000) 3,237,000 (1.520,000) (357,000) 1.360,000 Save for Later 2019 2020 Attempts: 0 of 3 used 2021 Submit Answer
Laura Hall, CEO of Wildhorse industries, is concerned about the recent volatility in the company's operating income. She believes that since the number of units sold has been fairly stable over the past three years that operating income also should have been stable. Laura asked Kevin Allen, Wildhorse's inventory manager, to help her understand the issue. Kevin reviewed the company's records and compiled the following changes to Finished Goods Inventory (in units) for the years 2019, 2020, and 2021. Beginning inventory Production Sales Ending Inventory 2019 1,000 40,000 (39,000) 2,000 Year 2020 2,000 38,000 (39,500) Cost of goods sold Units in beginning inventory Units sold from current year production Total cost of roods sold 500 2021 500 40,000 (39,500) 1,000 Kevin also gathered the 2019 Income statements prepared using absorption costing and variable costing, which follow. Income Statement-Absorption Costing. Sales $ 5,655,000 (93,000) (3,534,000) 13.627.0001
Transcribed Image Text:Laura Hall, CEO of Wildhorse industries, is concerned about the recent volatility in the company's operating income. She believes that since the number of units sold has been fairly stable over the past three years that operating income also should have been stable. Laura asked Kevin Allen, Wildhorse's inventory manager, to help her understand the issue. Kevin reviewed the company's records and compiled the following changes to Finished Goods Inventory (in units) for the years 2019, 2020, and 2021. Beginning inventory Production Sales Ending Inventory 2019 1,000 40,000 (39,000) 2,000 Year 2020 2,000 38,000 (39,500) Cost of goods sold Units in beginning inventory Units sold from current year production Total cost of roods sold 500 2021 500 40,000 (39,500) 1,000 Kevin also gathered the 2019 Income statements prepared using absorption costing and variable costing, which follow. Income Statement-Absorption Costing. Sales $ 5,655,000 (93,000) (3,534,000) 13.627.0001
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Accounting Changes and Error Analysis
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS