PA17. LO 6.5 This information was collected for the first year of manufacturing for Appliance Apps:Direct materials per unitDirect labor per unit$$$Variable manufacturing overhead per unitUnits producedVariable selling and administration expenses $Units soldSales priceFixed manufacturing expensesFixed selling and administration expenses2.501.500.251.7540,00035,00012$$140,000$ 20,000Requirements:1.) Prepare an income statement under variable costing.2.) Prepare an income statement under absorption costing.3.) Prepare a reconciliation to the income under the absorption method.FIVE STAR*****

The net income under variable costing and absorption costing gets differed due to fixed costs…

Answered: materials per unit Direct labor per…

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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show Total Period cost by using absorption costing.
1. Compute the unit product cost under absorption costing. 2. Compute the net income under absorption costing. 3. What will be the value of the ending inventory if the company is using absorption costing?
Problem 4-19 (Algo) Variable Costing Income Statement; Reconciliation [LO4-2, LO4-3] 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 (@$35 per unit) Gross margin Selling and administrative expenses* Net operating income $ Units produced Units sold $ *$3 per unit variable; $250,000 fixed each year. The company's $35 unit product cost is computed as follows: Year 1 Year 2 20,000 15,000 Year 1 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($360,000+ 20,000 units) Absorption costing unit product cost 20,000 25,000 945,000 525,000 420,000 295,000 125,000 Year 2 $ 1,575,000 875,000 700,000 325,000 375,000 $ Forty percent of fixed manufacturing overhead consists of wages and salaries; the remainder consists of depreciation charges on production equipment and buildings. Production and cost data for the first two years of operations are: $…
Baxtell Company manufactures and sells a single product. The following costs were incurred during the company's first year of operations: Variable costs per unit: Manufacturing: Direct materials Direct labour Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expense $ 27 7 4 9 370,800 183,200 During the year, the company produced 30,900 units and sold 22,900 units. The selling price of the company's product is $73 per unit. Required: 1. Assume that the company uses absorption costing. a. Compute the unit product cost. Unit product cost b. Prepare an income statement for the year. (Do not leave any empty spaces; Input a O wherever it is required.) Absorption Costing Income Statement Cost of goods sold:
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A manufacturer reports the following. Compute contribution margin. Sales Variable cost of goods sold Fixed overhead Variable selling and administrative costs Fixed selling and administrative costs Multiple Choice $800,000 $642,000 $762,000 $524,000 $ 1,218,000 418,000 338,000 158,000 118,000
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V. Prepare a CONTRIBUTION MARGIN (also known as variable costing) income statement given a traditional (also known as absorption costing) income statement Bruno Industries manufactures and sells a single product. The controller has prepared the following income statement for the most recent year: B C D 1 2 3 Bruno Industries Traditional Income Statement (Absorption Costing) For the Year Ended December 31 4 5 Sales revenue 6 Less: Cost of goods sold 7 Gross profit 8 Less: Operating expenses 9 Operating income $ 406,000 329,000 $ 77,000 73,000 $ 4,000 10 The company produced 8,000 units and sold 7,000 units during the year ending December 31. Fixed manufacturing overhead (MOH) for the year was $152,000, while fixed operating expenses were $62,000. The company had no beginning inventory. Requirements 1. Will the company's operating income under variable costing be higher, lower, or the same as its operating income under absorption costing? Why? 2. Prepare a variable costing income…
Required: 1. Determine the unit product cost under: a. Absorption costing. b. Variable costing. 2. Prepare variable costing income statements for July and August. 3. Reconcile the variable costing and absorption costing net operating incomes.
A. Manufacturing margin? b. Contribution margin? C. Operating income for PhiladelPho's company ?
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