Question 1 Limonade produced 11,000 cases of powdered drink mix and sold 10,000 cases in April 2010. The sale price was $25, variable costs were $10 per case ($8 manufacturing and $2 selling & administrative) and total fixed costs were $75,000 ($55,000 manufacturing and $20,000 selling & administrative). The company had no beginning inventory. Required: a) Calculate the following for Limonade i) The total cost per unit ii) The value of ending inventories using marginal costing iii) The value of ending inventories using total costing b) Prepare the April income statement using variable costing.
Question 1 Limonade produced 11,000 cases of powdered drink mix and sold 10,000 cases in April 2010. The sale price was $25, variable costs were $10 per case ($8 manufacturing and $2 selling & administrative) and total fixed costs were $75,000 ($55,000 manufacturing and $20,000 selling & administrative). The company had no beginning inventory. Required: a) Calculate the following for Limonade i) The total cost per unit ii) The value of ending inventories using marginal costing iii) The value of ending inventories using total costing b) Prepare the April income statement using variable costing.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question 1
Limonade produced 11,000 cases of powdered drink mix and sold 10,000 cases in April 2010.
The sale price was $25, variable costs were $10 per case ($8 manufacturing and $2 selling &
administrative) and total fixed costs were $75,000 ($55,000 manufacturing and $20,000
selling & administrative).
The company had no beginning inventory.
Required:
a) Calculate the following for Limonade
i) The total cost per unit
ii) The value of ending inventories using marginal costing
iii) The value of ending inventories using total costing
b) Prepare the April income statement using variable costing.
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b) Prepare the April income statement using variable costing.
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