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Problem 6-22 (Algo) Variable Costing Income Statements; Income Reconciliation [LO6-1, L06-2, LO6-3] Denton Company manufactures and sells a single product. Cost data for the product are given: Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Total variable cost per unit Fixed costs per month: Fixed manufacturing overhead Fixed selling and administrative Total fixed cost per month $4 10 2 2 $ 18 $ 126,000 172,000 $ 298,000 The product sells for $50 per unit. Production and sales data for July and August, the first two months of operations, follow:

Problem 6-22 (Algo) Variable Costing Income Statements; Income Reconciliation [LO6-1, L06-2, LO6-3] Denton Company manufactures and sells a single product. Cost data for the product are given: Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Total variable cost per unit Fixed costs per month: Fixed manufacturing overhead Fixed selling and administrative Total fixed cost per month $4 10 2 2 $ 18 $ 126,000 172,000 $ 298,000 The product sells for $50 per unit. Production and sales data for July and August, the first two months of operations, follow:

FINANCIAL ACCOUNTING
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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cos Problem 6-22 (Algo) Variable Costing Income Statements; Income Reconciliation [LO6-1, LO6-2, LO6-3] Denton Company manufactures and sells a single product. Cost data for the product are given: Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative $4 10 2 2 $18 Total variable cost per unit Fixed costs per month: Fixed manufacturing overhead Fixed selling and administrative Total fixed cost per month The product sells for $50 per unit. Production and sales data for July and August, the first two months of operations, follow: $ 126,000 172,000 $ 298,000
Transcribed Image Text:cos Problem 6-22 (Algo) Variable Costing Income Statements; Income Reconciliation [LO6-1, LO6-2, LO6-3] Denton Company manufactures and sells a single product. Cost data for the product are given: Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative $4 10 2 2 $18 Total variable cost per unit Fixed costs per month: Fixed manufacturing overhead Fixed selling and administrative Total fixed cost per month The product sells for $50 per unit. Production and sales data for July and August, the first two months of operations, follow: $ 126,000 172,000 $ 298,000
ces The product sells for $50 per unit. Production and sales data for July and August, the first two months of operations, follow: Units Produced Units Sold July August 17,000 25,000 The company's Accounting Department has prepared the following absorption costing income statements for July and August: July August $1,250,000 $ 850,000 374,000 21,000 21,000 Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Required: 1. Determine the unit product cost under: a. Absorption costing. b. Variable costing. 476,000 206,000 $ 270,000 550,000 700,000 222,000 $ 478,000 2. Prepare variable costing income statements for July and August. 3. Reconcile the variable costing and absorption costing net operating incomes.
Transcribed Image Text:ces The product sells for $50 per unit. Production and sales data for July and August, the first two months of operations, follow: Units Produced Units Sold July August 17,000 25,000 The company's Accounting Department has prepared the following absorption costing income statements for July and August: July August $1,250,000 $ 850,000 374,000 21,000 21,000 Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Required: 1. Determine the unit product cost under: a. Absorption costing. b. Variable costing. 476,000 206,000 $ 270,000 550,000 700,000 222,000 $ 478,000 2. Prepare variable costing income statements for July and August. 3. Reconcile the variable costing and absorption costing net operating incomes.
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