Problem 5 (Super-Variable Costing and Variable Costing Unit Product Costs and Income Statements) Lyns Company manufactures and sells one product. The following information pertains to the company's first year of operations: Variable cost per unit: Direct materials Fixed costs per year. Direct labor Fixed manufacturing overhead Fixed selling and administrative expenses 130 P7,500,000 P4,200,000 P1,100,000 The company does not incur any variable manufacturing overhead costs or variable selling and administrative expenses. During its first year of operations, Lyns produced 60,000 units and sold 52,000 units. The selling price of the company's product is P400 per unit. Required: 1. Assume the company uses super-variable costing: a. Compute the unit product cost for the year. b. Prepare an income statement for the year. 2. Assume the company uses a variable costing system that assigns P125.00 of direct labor cost to each unit produced: a. Compute the unit product cost for the year. b. Prepare an income statement for the year. 3. Prepare a reconciliation that explains the difference between the super- variable costing and variable costing net operation incomes.

Problem 5 (Super-Variable Costing and Variable Costing Unit Product Costs and Income Statements) Lyns Company manufactures and sells one product. The following information pertains to the company's first year of operations: Variable cost per unit: Direct materials Fixed costs per year. Direct labor Fixed manufacturing overhead Fixed selling and administrative expenses 130 P7,500,000 P4,200,000 P1,100,000 The company does not incur any variable manufacturing overhead costs or variable selling and administrative expenses. During its first year of operations, Lyns produced 60,000 units and sold 52,000 units. The selling price of the company's product is P400 per unit. Required: 1. Assume the company uses super-variable costing: a. Compute the unit product cost for the year. b. Prepare an income statement for the year. 2. Assume the company uses a variable costing system that assigns P125.00 of direct labor cost to each unit produced: a. Compute the unit product cost for the year. b. Prepare an income statement for the year. 3. Prepare a reconciliation that explains the difference between the super- variable costing and variable costing net operation incomes.

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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