Problem 19-4AA (Algo) Converting variable costing income to absorption costing income LO A2Dowell Company produces a single product. Its income under variable costing for its first two years of operation follow.Variable Costing IncomeIncomeAdditional Informationa. Sales and production data for these first two years follow.UniteUnits producedUnits soldDirect materialsDirect laborYear 1.Year 2$ 47,000 $ 650,000Year 148,70037,000b. The company's $37 per unit product cost (for both years) using absorption costing consists of the following.Year 248,70060,400Variable overheadFixed overhead ($470,000/47,000 units)Total product cost per unitVariable costing incomeAbsorption costing income$7119Required:Prepare a statement to convert variable costing income to absorption costing income for both years. (Leave no cells blank - be certainto enter "0" wherever required.)10$ 37Dowell CompanyConvert Variable Costing Income to Absorption Costing IncomeYear 1$ 47,000 $Year 2650,000

The absorption costing income differs from variable costing income due to fixed costs deferred in or…

Answered: Problem 19-4AA (Algo) Converting…

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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Exercise 19-9 (Algo) Absorption costing and variable costing income statements LO P2 Rey Company’s only product sells for $235 per unit. Data for its first year of operations follow. Direct materials $ 39 per unit Direct labor $ 47 per unit Variable overhead $ 5 per unit Fixed overhead $ 168,000 per year Variable selling and administrative expenses $ 37 per unit Fixed selling and administrative expenses $ 238,000 per year Units produced and sold 24,000 units 1. Prepare an income statement for the year using absorption costing2. Prepare an income statement for the year using variable costing.
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Question 8 Cranston Corporation makes four products in a single facility. Data concerning these products appear below: Products A C D B $42.30 Selling price per unit $50.00 $37.60 $ 33.50 $30.70 $ 21.00 $ 19.90 Variable manufacturing cost per unit $ 20.80 Variable selling cost per unit $2.10 $1.00 $2.40 $2.70 3.30 Milling machine minutes per unit 4.10 2.60 1.30 Monthly demand in units 1,000 4,000 3,000 3,000 The milling machines are potentially the constraint in the production facility. A total of 28,200 minutes are available per month on these machines. How many minutes of milling machine time would be required to satisfy demand for all four products? 23,500 28,200 O 11,000 O 31,400
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Exercise 19-15 (Algo) Absorption costing and overproduction LO C1 A manufacturer reports direct materials of $6 per unit, direct labor of $3 per unit, and variable overhead of $5 per unit. Fixed overhead Is $156,000 per year, and the company estimates sales of 15,600 units at a sales price of $26 per unit for the year. The company has no beginning finished goods inventory. 1. If the company uses absorption costing, compute gross profit assuming (a) 15,600 units are produced and 15,600 units are sold and (b) 19,500 units are produced and 15,600 units are sold. 2. If the company uses variable costing, how much would contribution margin differ if the company produced 19,500 units instead of producing 15,600? Assume the company sells 15,600 units. Hint: Calculations are not required. Complete this question by entering your answers in the tabs below. Required 1 Required 2 If the company uses absorption costing, compute gross profit assuming (a) 15,600 units are produced and 15,600 units are…
9
5 part 2
EXERCISE 1-7 Direct and Indirect Costs L01-1 2.000.81 10 Kubin Company's relevant range of production is 18,000 to 22,000 units. When it produces and sells 20,000 units, its average costs per unit are as follows: Juris Required: 1. 2. 3. 4. a. b. a. b. the Untus ha babubong asin Direct materials.. Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense.. Sales commissions...... Variable administrative expense. b. Average Cost per Unit $7.00 $4.00 $1.50 $5.00 $3.50 $2.50 $1.00 $0.50 Assume the cost object is units of production: What is the total direct manufacturing cost incurred to make 20,000 units? What is the total indirect manufacturing cost incurred to make 20,000 units? Assume the cost object is the Manufacturing Department and that its total output is 20,000 units. How much total manufacturing cost is directly traceable to the Manufacturing Department? How much total manufacturing cost is an indirect cost that…
Trio Company reports the following information for its first year of operations. $ 20 per unit $ 21 per unit $ 9 per unit $ 263,250 per year 20,250 units 15,500 units 4,750 units Direct materials Direct labor Variable overhead Fixed overhead Units produced Units sold Ending finished goods inventory Exercise 19-2 (Algo) Computing unit and inventory costs under variable costing LO P1 Assume instead that Trio Company uses variable costing. 1. Compute the product cost per unit using variable costing. 2. Determine the cost of ending finished goods inventory using variable costing. 3. Determine the cost of goods sold using variable costing. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the product cost per unit using variable costing. Product cost per unit of finished goods using: Total product cost per unit $ Variable costing 0 per unit
Question 9.3 Burnaby traders makes four products in a single facility. Following information regarding products is given: Product A B C D Selling Price per Unit $35.30 $30.20 $20.80 $26.00 Variable Manufacturing Cost per Unit $16.50 $15.80 $7.90 $8.50 Variable Selling Cost per Unit $3.80 $1.60 $1.90 $3.30 Milling Machine Minutes per Unit 3.20 1.80 2.20 2.50 Monthly Deman in Units 4,000 1,000 3,000 1,000 Maximum minutes on all machines (22,600) Required: 1) How many minutes of milling machine time would be required to satisfy demand for all four products? 2) Which product makes the LEAST profitable use of the milling machines? 3) Which product makes the MOST profitable use of the milling machines?
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