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Problém The Honey Company is comparing its present absorption costing practices with direct costing methods. An examination of its records produced the following information: Maximum plant capacity Normal capacity Fixed factory overhead Fixed marketing and administrative expense Sales price per unit Standard variable manufacturing cost per unit Variable marketing expense per unit sold 40,000 units 36,000 units P54,000 P20,000 10 P. 4 P. P 1

Problém The Honey Company is comparing its present absorption costing practices with direct costing methods. An examination of its records produced the following information: Maximum plant capacity Normal capacity Fixed factory overhead Fixed marketing and administrative expense Sales price per unit Standard variable manufacturing cost per unit Variable marketing expense per unit sold 40,000 units 36,000 units P54,000 P20,000 10 P. 4 P. P 1

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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Problem 2 The Honey Company is comparing its present absorption costing practices with direct costing methods. An examination of its records produced the following information: Maximum plant capacity Normal capacity Fixed factory overhead Fixed marketing and administrative expense Sales price per unit Standard variable manufacturing cost per unit Variable marketing expense per unit sold 40,000 units 36,000 units P54,000 P20,000 P 10 P 4 P 1
Transcribed Image Text:Problem 2 The Honey Company is comparing its present absorption costing practices with direct costing methods. An examination of its records produced the following information: Maximum plant capacity Normal capacity Fixed factory overhead Fixed marketing and administrative expense Sales price per unit Standard variable manufacturing cost per unit Variable marketing expense per unit sold 40,000 units 36,000 units P54,000 P20,000 P 10 P 4 P 1
For the year, the following data are available: Budgeted production Actual production Sales Finished goods inventory, January 1 Unfavorable variances from standard variable manufacturing costs 36,000 units 30,000 units 28,000 units P1,000 P5,000 All variances are written off directly at year-end as an adjustment to Cost of Goods Sold. Required: 1. Prepare the income statement under the direct costing method. 2. Prepare the income statement under the absorption costing method.
Transcribed Image Text:For the year, the following data are available: Budgeted production Actual production Sales Finished goods inventory, January 1 Unfavorable variances from standard variable manufacturing costs 36,000 units 30,000 units 28,000 units P1,000 P5,000 All variances are written off directly at year-end as an adjustment to Cost of Goods Sold. Required: 1. Prepare the income statement under the direct costing method. 2. Prepare the income statement under the absorption costing method.
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