Pattison Products, Inc., began operations in October and manufactured 46,000 units during the month with the following unit costs: Direct materials $7.00 Direct labor 5.00 Variable overhead 2.50 Fixed overhead* 9.00 Variable marketing cost 2.20 * Fixed overhead per unit = $414,000 / 46,000 units produced = $9 Total fixed factory overhead is $414,000 per month. During October, 44,200 units were sold at a price of $28.50, and fixed marketing and administrative expenses were $119,400. Required: Question Content Area 1. Calculate the cost of each unit using absorption costing. Round your final answer to the nearest cent. $fill in the blank 9757e3078ffdfb7_1 per unit 2. How many units remain in ending inventory? fill in the blank 9757e3078ffdfb7_2 units What is the cost of ending inventory using absorption costing? $fill in the blank 9757e3078ffdfb7_3 Question Content Area 3. Prepare an absorption-costing income statement for Pattison Products, Inc., for the month of October. Pattison Products, Inc.Absorption-Costing Income StatementFor the Month of October $- Select - - Select - Gross profit $fill in the blank f2b6c2031009036_5 Less: - Select - - Select - Operating income $fill in the blank f2b6c2031009036_10 Question Content Area 4. What if November production was 46,000 units, costs were stable, and sales were 47,000 units? What is the cost of ending inventory? $fill in the blank 1132ebf6103c051_1 What is operating income for November? $fill in the blank 1132ebf6103c051_2
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Absorption Costing, Value of Ending Inventory, Operating Income
Pattison Products, Inc., began operations in October and manufactured 46,000 units during the month with the following unit costs:
| Direct materials | $7.00 |
| Direct labor | 5.00 |
| Variable |
2.50 |
| Fixed overhead* | 9.00 |
| Variable marketing cost | 2.20 |
* Fixed overhead per unit = $414,000 / 46,000 units produced = $9
Total fixed factory overhead is $414,000 per month. During October, 44,200 units were sold at a price of $28.50, and fixed marketing and administrative expenses were $119,400.
Required:
Question Content Area
1. Calculate the cost of each unit using absorption costing. Round your final answer to the nearest cent.
$fill in the blank 9757e3078ffdfb7_1 per unit
2. How many units remain in ending inventory?
fill in the blank 9757e3078ffdfb7_2 units
What is the cost of ending inventory using absorption costing?
$fill in the blank 9757e3078ffdfb7_3
Question Content Area
3. Prepare an absorption-costing income statement for Pattison Products, Inc., for the month of October.
|
|
$- Select - |
|
|
- Select - |
| Gross profit | $fill in the blank f2b6c2031009036_5 |
| Less: | |
|
|
- Select - |
|
|
- Select - |
| Operating income | $fill in the blank f2b6c2031009036_10 |
Question Content Area
4. What if November production was 46,000 units, costs were stable, and sales were 47,000 units? What is the cost of ending inventory?
$fill in the blank 1132ebf6103c051_1
What is operating income for November?
$fill in the blank 1132ebf6103c051_2
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