Question 2 Gia's Foods produces frozen meals, which it sells for $8 each. The company computes a new monthly fixed manufacturing overhead rate based on the planned number of meals to be produced that month. All costs and production levels are exactly as planned. The following data are from Gia's Foods first month in business. Sales Production Variable manufacturing cost per meal Sales commission cost per meal Total fixed manufacturing overhead Total fixed marketing and administrative costs January 2007 1,000 meals 1,400 meals $4.00 $1.00 $700 $600 Requirements: i) Compute the product cost per meal produced under absorption costing and under variable costing. ii) Prepare the income statement for January 2007 using variable costing iii) List three situations in which marginal costing, as a technique, aids decision-making.

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

Please note before answer the questions.

 

This discussion focuses on Marginal costing. In preparing your responses, please be reminded of the following:

Beginning Units + Units Produced - Ending Units = Units Sold

Ending Units = Beginning Units + Units Produced - Units Sold

ü  COGM = Beginning WIP Inventory + TMC - Ending WIP Inventory.

ü  COGS = Beginning FG Inventory + COGM - Ending FG Inventory.

Where there is neither beginning nor ending WIP, COGM = TMC.

ü  COGS = Beginning FG Inventory + TMC - Ending FG Inventory

This is an important topic so taking part in the discussion solidifies your understanding or lack of understanding for the topic.

 

 

Question 2
Gia's Foods produces frozen meals, which it sells for $8 each. The company computes a new
monthly fixed manufacturing overhead rate based on the planned number of meals to be
produced that month. All costs and production levels are exactly as planned. The following
data are from Gia's Foods first month in business.
Sales
Production
Variable manufacturing cost per meal
Sales commission cost per meal
Total fixed manufacturing overhead
Total fixed marketing and administrative costs
January 2007
1,000 meals
1,400 meals
$4.00
$1.00
$700
$600
Requirements:
Compute the product cost per meal produced under absorption costing and under
variable costing.
i)
ii)
Prepare the income statement for January 2007 using variable costing
iii)
List three situations in which marginal costing, as a technique, aids decision-making.
Transcribed Image Text:Question 2 Gia's Foods produces frozen meals, which it sells for $8 each. The company computes a new monthly fixed manufacturing overhead rate based on the planned number of meals to be produced that month. All costs and production levels are exactly as planned. The following data are from Gia's Foods first month in business. Sales Production Variable manufacturing cost per meal Sales commission cost per meal Total fixed manufacturing overhead Total fixed marketing and administrative costs January 2007 1,000 meals 1,400 meals $4.00 $1.00 $700 $600 Requirements: Compute the product cost per meal produced under absorption costing and under variable costing. i) ii) Prepare the income statement for January 2007 using variable costing iii) List three situations in which marginal costing, as a technique, aids decision-making.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

Blurred answer
Knowledge Booster
Financial Reporting in Hyperinflationary Economies
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
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