On January 1 of the current year, Townsend Co. commenced operations. It operatedits plant at 100% of capacity during January. The following data summarized theresults for January:وا من ومی و ی م م م م م م یUnits50,000ProductionSales ($18 per unit)Inventory, January 3142.0008,000Manufacturing costs:Variable$575,000Fixed80,000Total$655,000Selling and administrative expenses:$ 35,00010,500$ 45,500VariableFixedTotal(a) Prepare an income statement using absorption costing.ان می و ن و ن ی و و و ی و ه م(b) Prepare an income statement using variable costing.و م م م م م م م م مه مه م(C) Explain the reason for difference between two incomesا ی و ه و و ه و و و و و و و و ه مه م

The absorption costing System and Variable costing system are two methods used to value the…

On January 1 of the current year, Townsend Co. commenced operations. It operated its plant at 100% of capacity during January. The following data summarized the results for January: Units 50,000 Production Sales ($18 per unit) Inventory, January 31 42,000 8,000 Manufacturing costs: Variable $575,000 80,000 $655,000 Fixed Total Selling and administrative expenses: $ 35,000 10,500 $ 45,500 Variable Fixed Total (a) Prepare an income statement using absorption costing. (b) Prepare an income statement using variable costing. (C) Explain the reason for difference between two incomes

On January 1 of the current year, Townsend Co. commenced operations. It operated its plant at 100% of capacity during January. The following data summarized the results for January: Units 50,000 Production Sales ($18 per unit) Inventory, January 31 42,000 8,000 Manufacturing costs: Variable $575,000 80,000 $655,000 Fixed Total Selling and administrative expenses: $ 35,000 10,500 $ 45,500 Variable Fixed Total (a) Prepare an income statement using absorption costing. (b) Prepare an income statement using variable costing. (C) Explain the reason for difference between two incomes

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Sims Company began operations on January 1. Its cost and sales information for this year follow. Direct materials $ 40 per unit Direct labor $ 60 per unit Variable overhead $ 40 per unit Fixed overhead $ 6,600,000 per year Variable selling and administrative expenses $ 11 per unit Fixed selling and administrative expenses $ 4,000,000 per year Units produced 110,000 units Units sold 80,000 units Sales price $ 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.
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.
A manufacturer reports the following costs to produce 14,000 units In Its first year of operations: direct materials, $14 per unit, direct lalbor, $10 pe w and fixed overhead, $224,000. Of the 14,000 units produced, 12,900 were sold, and 1,100 remain in Inventory at year-end.Under varlable conting, the Multiple Cholce $27,500. $26,400. $38,500. $44,000. $56,100.
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…
The following data pertain to the operations of Deci, Inc. in the most recent month for the production of its only product, which sells for $297: Beginning inventory: 4, 000 Units Produced: 46,000 Units Sold: 47,000 Variable Costs per unit: Direct materials: $84 Direct Labor: $93 Manufacturing Overhead: $18 Selling and Administrative: $30 Fixed Costs: Manufacturing overhead: $1,912, 680 Selling and administrative: $1,954, 260 What is the variable costing unit product cost?
On January 1 of the current year, Townsend Co. commenced operations. It operated its plant at 100% of capacity during January. The following data summarized the results for January: Units Production 50,000 Sales ($18 per unit) (42,000) Inventory, January 31 8,000 Manufacturing costs: Variable $575,000 Fixed 80,000 Total $655,000 Selling and administrative expenses: Variable $35,000 Fixed 10,500 Total $45,500 a. Prepare an income statement using absorption costing. Townsend Co. Absorption Costing Income Statement For the Month Ended January 31 Next
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?
A business operated at 100% of capacity during its first month and incurred the following costs: Production costs (17,100 units): Direct materials $183,100 Direct labor 227,700 Variable factory overhead 246,200 Fixed factory overhead 104,700 $761,700 Operating expenses: Variable operating expenses $122,200 Fixed operating expenses 49,300 171,500 If 1,600 units remain unsold at the end of the month and sales total $1,079,000 for the month, what would be the amount of income from operations reported on the absorption costing income statement? a.$216,975 b.$71,270 c.$207,274 d.$61,474
Trio Company reports the following information for the current year, which is its first year of operations. Direct materials $ 14 per unit Direct labor $ 19 per unit Overhead costs for the year Variable overhead $ 2 per unit Fixed overhead $ 100,000 per year Units produced this year 25,000 units Units sold this year 19,000 units Ending finished goods inventory in units 6,000 units
Joplin Company Absorption Costing Income Statement For the Month Ended April 30 Sales (2,500 units) Cost of goods sold: Cost of goods manufactured (2,900 units) Inventory, April 30 (400 units) Total cost of goods sold Gross profit Selling and administrative expenses Operating income $75,400 (10,400) $92,500 (65,000) $27,500 (16,050) $11,450 If the fixed manufacturing costs were $18,096 and the fixed selling and administrative expenses were $7,860, prepare an income statement according to the i variable costing concept. Round all final answers to whole dollars.