erly below).The production volume variance for 2021 was determined from the fixed overhead rate of $175 per unit ($1,225,000/7,000 budgetedunits). Because the actual production level was 600 units short of the budgeted level in 2021 (7,000 -6,400), the amount of theproduction volume variance in 2021 was 600 x $175 $105,000. The production volume variance is underapplied because the actualproduction level is less than budgeted, and the production volume variance is therefore added back to cost of goods sold todetermine the amount of cost of goods sold in the full costing income statement. The full costng income statement for 2021 is shownbelow:SalesCost of goods sold:Beginning inventoryCost of goods producedCost of goods available for saleLess ending inventoryCost of goods sold:Plus unfavorable production volume varianceAdjusted cost of goods soldGross marginLess selling and administrative costsVariableFixedOperating income$ 1,100,0008,800,000$ 9,900,0001,375,000Complete this question$ 775,000120,00012,989,000$ 8,525,000105,000$8,630,000$4,359,000895,000$ 3,464,000Required:1. Using the full costing method, prepare the income statement for 2022.2-a. Using variable costing, prepare an income statement for each period.2-b. Prepare a reconciliation of the difference each year in the operating income resulting from the full- and variable-costing methods.

Answered: Image /qna-images/answer/54fda772-dee8-45cf-8c4b-93d2e31af7bf.jpg

Required: 1. Using the full costing method, prepare the income statement for 2022. 2-a. Using variable costing, prepare an income statement for each period. 2-b. Prepare a reconciliation of the difference each year in the operating income resulting from the full- and variable-costing methods. Complete this question

Required: 1. Using the full costing method, prepare the income statement for 2022. 2-a. Using variable costing, prepare an income statement for each period. 2-b. Prepare a reconciliation of the difference each year in the operating income resulting from the full- and variable-costing methods. Complete this question

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Blue Spruce Inc. manufactures basketballs for professional basketball associations. For the first six months of 2022, the company reported the following operating results while operating at 90% of plant capacity: Sales Cost of goods sold Selling and administrative expenses Net income Amount $5,049,000 3,465.000 445,500 $1.138,500 Per Unit $51.00 35.00 4.50 $11.50 Fixed costs for the period were cost of goods sold of $990,000, and selling and administrative expenses of $178.200. In July, normally a slack manufacturing month, Blue Spruce receives a special order for 9.900 basketballs at $32,00 each from the Italian Basketball Association. Accepting the order would increase variable selling and administrative expenses by $0.75 per unit because of shipping costs, but it would not increase fixed costs and expenses.
Q.Prepare income statements with one column for 2016, one column for 2017, and one column for the two years together using (a) variable costing and (b) absorption costing.
Contribution Margin, Break-Even Sales, Cost-Volume-Profit Chart, Margin of Safety, and Operating Leverage Belmain Co. expects to maintain the same inventories at the end of 20Y7 as at the beginning of the year. The total of all production costs for the year is therefore assumed to be equal to the cost of goods sold. With this in mind, the various department heads were asked to submit estimates of the costs for their departments during the year. A summary report of these estimates is as follows: EstimatedFixedCost EstimatedVariableCost(perunitsold) Production costs: Direct materials $22 Direct labor 14 Factory overhead $514,300 11 Selling expenses: Sales salaries and commissions 106,900 5 Advertising 36,200 Travel 8,000 Miscellaneous selling expense 8,800 4 Administrative expenses: Office and officers' salaries 104,500 Supplies 12,900 2…
a) Compute the selling price per unit in 2019, using the equation method. b) Given the sales of 3,000 units and the selling price calculated in (a), prepare a contribution marginincome statement for the year ended December 31, 2019, detailing the components of total fixed costsand clearly showing contribution and net income. c) Calculate Benoit’s break-even point in units and in sales dollars.
Q3) A. The following information has been taken from the accounting records of Ahmed and Company in first and second period. Period Sales Profit 2019 $ 100,000 $15,000 2020 150,000 25,000 Calculate: 1) Profit volume ratio 2) Fixed cost for two periods 3) Variable cost of two periods.
A
Contribution Margin, Break-Even Sales, Cost-Volume-Profit Chart, Margin of Safety, and Operating Leverage Belmain Co. expects to maintain the same inventories at the end of 20Y7 as at the beginning of the year. The total of all production costs for the year is therefore assumed to be equal to the cost of goods sold. With this in mind, the various department heads were asked to submit estimates of the costs for their departments during the year. A summary report of these estimates is as follows: EstimatedFixed Cost Estimated Variable Cost(per unit sold) Production costs: Direct materials — $19 Direct labor — 13 Factory overhead $105,800 10 Selling expenses: Sales salaries and commissions 22,000 4 Advertising 7,400 — Travel 1,700 — Miscellaneous selling expense 1,800 4 Administrative expenses: Office and officers' salaries 21,500 — Supplies 2,600…
Total cost and number of units in the first seven months of 2020 are given below. According to this information, which of the following is the cost equation? Periods Total Cost No.of Units January 21,410 210 February March 22,040 240 22,775 275 April 23,195 295 May 23,510 310 June 23,720 320 July 24,350 350 Select one: O a. Y=23150+25*X O b. Y=20500+23*X O C.Y=20000+22.5*X O d. Y=17000+21*X
Contribution Margin, Break-Even Sales, Cost-Volume-Profit Chart, Margin of Safety, and Operating Leverage Belmain Co. expects to maintain the same inventories at the end of 20Y7 as at the beginning of the year. The total of all production costs for the year is therefore assumed to be equal to the cost of goods sold. With this in mind, the various department heads were asked to submit estimates of the costs for their departments during the year. A summary report of these estimates is as follows: EstimatedFixed Cost Estimated Variable Cost(per unit sold) Production costs: Direct materials — $28 Direct labor — 19 Factory overhead $495,200 14 Selling expenses: Sales salaries and commissions 102,900 6 Advertising 34,800 — Travel 7,700 — Miscellaneous selling expense 8,500 6 Administrative expenses: Office and officers' salaries 100,600 — Supplies 12,400…
Contribution margin, break-even sales, cost-volume-profit chart, marginof safety, and operating leverageBelmain Co. expects to maintain the same inventories at the end of 20Y7 as at the beginning of the year. The total of all production costs for theyear is therefore assumed to be equal to the cost of goods sold. With thisin mind, the various department heads were asked to submit estimatesof the costs for their departments during the year. A summary report ofthese estimates is as follows: (attached) It is expected that 12,000 units will be sold at a price of $240 a unit.Maximum sales within the relevant range are 18,000 units.Instructions 1. Prepare an estimated income statement for 20Y7.2. What is the expected contribution margin ratio?3. Determine the break-even sales in units and dollars. 4. Construct a cost-volume-profit chart indicating the break-evensales.5. What is the expected margin of safety in dollars and as apercentage of sales?6. Determine the operating leverage.
Do you AGREE or DISAGREE with the following statement? A firm which wants to MAXIMIZE Net Income subsequent to a business combination may want to allocate as much of the purchase price as possible to Intangible Assets that have an indefinite useful life. Please circle either AGREE or DISAGREE, and BRIEFLY support your answer
Please answer all otherwise skip it, Please provide answer in text (Without image)