Homework Help is Here – Start Your Trial Now!
Business
Accounting
Problem 8-35 Variable-Costing and Absorption-Costing Income Statements (LO 8- 2, 8-3, 8-4, 8-6) Great Outdoze Company manufactures sleeping bags, which sell for $66.00 each. The variable costs of production are as follows: Direct material Direct labor variable manufacturing overhead $18.10 10.40 7.10 Budgeted fixed overhead in 20x1 was $145,200 and budgeted production was 22,000 sleeping bags. The year's actual production was 22,000 units, of which 19,700 were sold. Variable selling and administrative costs were $1.70 per unit sold; fixed selling and administrative costs were $27,000. Required: 1. Calculate the product cost per sleeping bag under (a) absorption costing and (b) variable costing. 2-a. Prepare an operating income statement for the year using absorption costing. 2-b. Prepare an operating income statement for the year using variable costing. 3. Reconcile reported operating income under the two methods using the shortcut method.

Problem 8-35 Variable-Costing and Absorption-Costing Income Statements (LO 8- 2, 8-3, 8-4, 8-6) Great Outdoze Company manufactures sleeping bags, which sell for $66.00 each. The variable costs of production are as follows: Direct material Direct labor variable manufacturing overhead $18.10 10.40 7.10 Budgeted fixed overhead in 20x1 was $145,200 and budgeted production was 22,000 sleeping bags. The year's actual production was 22,000 units, of which 19,700 were sold. Variable selling and administrative costs were $1.70 per unit sold; fixed selling and administrative costs were $27,000. Required: 1. Calculate the product cost per sleeping bag under (a) absorption costing and (b) variable costing. 2-a. Prepare an operating income statement for the year using absorption costing. 2-b. Prepare an operating income statement for the year using variable costing. 3. Reconcile reported operating income under the two methods using the shortcut method.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question

4

Problem 8-35 Variable-Costing and Absorption-Costing Income Statements (LO 8- 2, 8-3, 8-4, 8-6) Great Outdoze Company manufactures sleeping bags, which sell for $66.00 each. The variable costs of production are as follows: Direct material Direct labor Variable manufacturing overhead $18.10 10.40 7.10 Budgeted fixed overhead in 20x1 was $145,200 and budgeted production was 22,000 sleeping bags. The year's actual production was 22,000 units, of which 19,700 were sold. Variable selling and administrative costs were $1.70 per unit sold; fixed selling and administrative costs were $27,000. Required: 1. Calculate the product cost per sleeping bag under (a) absorption costing and (b) variable costing. 2-a. Prepare an operating income statement for the year using absorption costing. 2-b. Prepare an operating income statement for the year using variable costing. 3. Reconcile reported operating income under the two methods using the shortcut method.
Transcribed Image Text:Problem 8-35 Variable-Costing and Absorption-Costing Income Statements (LO 8- 2, 8-3, 8-4, 8-6) Great Outdoze Company manufactures sleeping bags, which sell for $66.00 each. The variable costs of production are as follows: Direct material Direct labor Variable manufacturing overhead $18.10 10.40 7.10 Budgeted fixed overhead in 20x1 was $145,200 and budgeted production was 22,000 sleeping bags. The year's actual production was 22,000 units, of which 19,700 were sold. Variable selling and administrative costs were $1.70 per unit sold; fixed selling and administrative costs were $27,000. Required: 1. Calculate the product cost per sleeping bag under (a) absorption costing and (b) variable costing. 2-a. Prepare an operating income statement for the year using absorption costing. 2-b. Prepare an operating income statement for the year using variable costing. 3. Reconcile reported operating income under the two methods using the shortcut method.
Expert Solution
steps

Step by step

Solved in 6 steps with 4 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS