Nautilus Manufacturing provides the following data for its production and sales operations during the year: Item Amount Beginning inventory in units 0 Units produced Units sold 6,000 5,000 Sales Material cost (unit level/variable) $500,000 $120,000 $60,000 Variable conversion cost (committed) Facility-level/fixed manufacturing cost $90,000 Indirect operating costs (fixed) The absorption cost of goods sold is: $100,000 A. $310,000 B. $200,000 C. $225,000 D. $100,000

Nautilus Manufacturing provides the following data for its production and sales operations during the year: Item Amount Beginning inventory in units 0 Units produced Units sold 6,000 5,000 Sales Material cost (unit level/variable) $500,000 $120,000 $60,000 Variable conversion cost (committed) Facility-level/fixed manufacturing cost $90,000 Indirect operating costs (fixed) The absorption cost of goods sold is: $100,000 A. $310,000 B. $200,000 C. $225,000 D. $100,000

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 22E: Ellerson Company provided the following information for the last calendar year: During the year,...

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Income Statements under Absorption and Variable Costing In the coming year, Kalling Company expects to sell 28,700 units at 32 each. Kallings controller provided the following information for the coming year: Required: 1. Calculate the cost of one unit of product under absorption costing. 2. Calculate the cost of one unit of product under variable costing. 3. Calculate operating income under absorption costing for next year. 4. Calculate operating income under variable costing for next year.
The following data were adapted from a recent income statement of Caterpillar Inc. (CAT) for the year ended December 31: Assume that 8,500 million of cost of goods sold and 4,000 million of selling, administrative, and other expenses were fixed costs. Inventories at the beginning and end of the year were as follows: Also, assume that 30% of the beginning and ending inventories were fixed costs. a. Prepare an income statement according to the variable costing concept for Caterpillar Inc. Round numbers to nearest million. b. Explain the difference between the amount of operating income reported under the absorption costing and variable costing concepts. Round numbers to nearest million.
The following production data came from the records of Olympic Enterprises for the year ended December 31, 2016: During the year, 40,000 units were manufactured but only 35,000 units were sold. Determine the effect on inventory valuation by computing the following: 1. Total inventoriable costs and the cost of the 35,000 units sold and of the 5,000 units in the ending inventory, using variable costing. 2. Total inventoriable costs and the cost of the 35,000 units sold and of the 5,000 units in the ending inventory, using absorption costing.
Cost of Goods Manufactured, Income Statement W. W. Phillips Company produced 4,000 leather recliners during the year. These recliners sell for 400 each. Phillips had 500 recliners in finished goods inventory at the beginning of the year. At the end of the year, there were 700 recliners in finished goods inventory. Phillips accounting records provide the following information: Required: 1. Prepare a statement of cost of goods manufactured. 2. Compute the average cost of producing one unit of product in the year. 3. Prepare an income statement for external users.
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FamaNyame Company has three divisions : Ess,Wae, and Zee. Division Ess' income statement shows the following for the year ended December 31 Sales-GHC1500000; Cost of goods sold - GHC1125000; Selling expenses- GHC125000, and administrative expenses- GHC 350000. Cost of goods sold is 80 per cent variable and 20 per cent fixed. Of the fixed costs, 50 per cent are avoidable if the division is closed. All the selling expenses relate to the division and would be eliminated if Division Ess were eliminated. Of the administrative costs, 85 per cent are applied from corporate expenses. If Division Ess were eliminated, FamaNyame's income would
Yancey, Inc reports the following information Units produced Units sold Sales poce Direct materials Direct labor 520 units 520 units $150 per unit $40 per unit $30 per unit Variable manufacturing overhead Fixed manufacturing overhead $20 per unit $24,000 per year $15 per unit Variable selling and administrative costs Fixed selling and administrative costs $25,000 per year What is the amount of unit product cost that will be considered for external reporting purposes? (Round any intermediate calculations and your final answer to the nearest cent) OA. $76 15 OB 5136 15 OC. $116 15 OD $80.00
Dowell Company produces a single product. Its income statements under absorption costing for its first two years of operation follow. Income Statements (Absorption Costing) Sales ($46 per unit) Year 1 $920,000 620,000 300,000 170,000 $ 130,000 Cost of goods sold ($31 per unit) Gross profit Selling and administrative expenses Income Additional Information a. Sales and production data for these first two years follow. Units Units produced Units sold Direct materials Direct labor Variable overhead Year 1 30,000 20,000 b. Variable costs per unit and fixed costs per year are unchanged during these years. The company's $31 per unit product cost using absorption costing consists of the following. Fixed overhead ($300,000/30,000 units) Total product cost per unit Year 2 30,000 40,000 Income (Loss) $5 9 c. Selling and administrative expenses consist of the following. 10 $31 Selling and Administrative Expenses Variable selling and administrative ($2.50 per unit sold) Fixed selling and…
The following information applies to the questions displayed below.]Dowell Company produces a single product. Its income statements under absorption costing for its first two years of operation follow. 2018 2019 Sales ($46 per unit) $ 920,000 $ 1,840,000 Cost of goods sold ($31 per unit) 620,000 1,240,000 Gross margin 300,000 600,000 Selling and administrative expenses 290,000 340,000 Net income $ 10,000 $ 260,000 Additional Information Sales and production data for these first two years follow. 2018 2019 Units produced 30,000 30,000 Units sold 20,000 40,000 Variable cost per unit and total fixed costs are unchanged during 2018 and 2019. The company's $31 per unit product cost consists of the following. Direct materials $ 5 Direct labor 9 Variable overhead 7 Fixed overhead ($300,000/30,000 units) 10 Total product cost per unit $ 31 Selling…
Byron Company has five products in its inventory and uses the FIFO cost flow assumption. Specific data for each product are as follows: Product Cost Selling Price Estimated Cost of Disposal A $90,000 $150,000 $20,000 B 110,000 120,000 15,000 C 60,000 70,000 5,000 D 100,000 115,000 5,000
Dowell Company produces a single product. Its income statements under absorption costing for its first two years of operation follow. Income Statements (Absorption Costing) Sales ($58 per unit) Cost of goods sold ($48 per unit) Gross profit Selling and administrative expenses Income Year 1 Year 2 $ 1,914,000 $ 3,538,000 2,928,000 1,584,000 330,000 223,000 610,000 251,000 $ 107,000 $ 359,000 Additional Information a. Sales and production data for these first two years follow. Units Units produced Units sold Year 1 47,000 33,000 Year 2 47,000 61,000 b. Variable costs per unit and fixed costs per year are unchanged during these years. The company's $48 per unit product cost using absorption costing consists of the following. Direct materials Direct labor Variable overhead Fixed overhead ($423,000/47,000 units) Total product cost per unit $ 17 17 5 9 $ 48 c. Selling and administrative expenses consist of the following. Selling and Administrative Expenses Variable selling and administrative…
provide the cost of good sold per unit, gross profit per unit and operating income