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mpany produce and sens a single produc ne year just completed: Beginning inventory. Units produced. Units sold. Selling price per unit. Selling and administrative expenses: Variable per unit.. Fixed (total).. Manufacturing costs: Direct materials cost per unit.. Direct labor cost per unit....... Variable manufacturing overhead cost per unit. Fixed manufacturing overhead (total). Assume that direct labor is a variable cost. owing data refer to the 0 20,000 19,000 $350 $10 $225,000 $190 $40 $25 $250,000 Required: a. Compute the cost of a single unit of product under both the absorption costing and variable costing approaches. b. Prepare an income statement for the year using absorption costing. c. Prepare an income statement for the year using variable costing. d. Reconcile the absorption costing and variable costing net operating income figures in (b) and (c) above.

mpany produce and sens a single produc ne year just completed: Beginning inventory. Units produced. Units sold. Selling price per unit. Selling and administrative expenses: Variable per unit.. Fixed (total).. Manufacturing costs: Direct materials cost per unit.. Direct labor cost per unit....... Variable manufacturing overhead cost per unit. Fixed manufacturing overhead (total). Assume that direct labor is a variable cost. owing data refer to the 0 20,000 19,000 $350 $10 $225,000 $190 $40 $25 $250,000 Required: a. Compute the cost of a single unit of product under both the absorption costing and variable costing approaches. b. Prepare an income statement for the year using absorption costing. c. Prepare an income statement for the year using variable costing. d. Reconcile the absorption costing and variable costing net operating income figures in (b) and (c) above.

FINANCIAL ACCOUNTING
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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1. The Dean Company produces and sells a single product. The following data refer to the year just completed: Beginning inventory. Units produced.. Units sold. Selling price per unit ...... Selling and administrative expenses: Variable per unit... Fixed (total).... Manufacturing costs: Direct materials cost per unit. Direct labor cost per unit. Variable manufacturing overhead cost per unit Fixed manufacturing overhead (total). Assume that direct labor is a variable cost. 20,000 19,000 $350 $10 $225,000 $190 $40 $25 $250,000 Required: a. Compute the cost of a single unit of product under both the absorption costing and variable costing approaches. b. Prepare an income statement for the year using absorption costing. c. Prepare an income statement for the year using variable costing. d. Reconcile the absorption costing and variable costing net operating income figures in (b) and (c) above.
Transcribed Image Text:1. The Dean Company produces and sells a single product. The following data refer to the year just completed: Beginning inventory. Units produced.. Units sold. Selling price per unit ...... Selling and administrative expenses: Variable per unit... Fixed (total).... Manufacturing costs: Direct materials cost per unit. Direct labor cost per unit. Variable manufacturing overhead cost per unit Fixed manufacturing overhead (total). Assume that direct labor is a variable cost. 20,000 19,000 $350 $10 $225,000 $190 $40 $25 $250,000 Required: a. Compute the cost of a single unit of product under both the absorption costing and variable costing approaches. b. Prepare an income statement for the year using absorption costing. c. Prepare an income statement for the year using variable costing. d. Reconcile the absorption costing and variable costing net operating income figures in (b) and (c) above.
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