Required information Exercise 6-11 (Algo) Absorption costing and variable costing income statements LO P2 [The following information applies to the questions displayed below.] Oak Mart, a producer of solid oak tables, reports the following data from its first year of business. Sales price per unit Units produced this year Units sold this year $ 420 per unit 136,000 units 136,000 units Variable selling and administrative expenses Fixed selling and administrative expenses Direct materials Direct labor $ 32 per unit $4,700,000 per year $60 per unit $ 82 per unit $ 48 per unit Variable overhead Fixed overhead $ 10,744,000 per year Exercise 6-11 (Algo) Part 1 1. Prepare the current-year income statement using variable costing. Sales Less: Variable expenses Income OAK MART Income Statement (Variable Costing) Exercise 6-11 (Algo) Part 2 Income $ 57,120,000 2. Prepare the current-year income statement using absorption costing. OAK MART Income Statement (Absorption Costing) 0
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
![Required information
Exercise 6-11 (Algo) Absorption costing and variable costing income statements LO
P2
[The following information applies to the questions displayed below.]
Oak Mart, a producer of solid oak tables, reports the following data from its first year of business.
Sales price per unit
Units produced this year
$ 420 per unit
136,000 units
136,000 units
Units sold this year
Variable selling and administrative expenses
Fixed selling and administrative expenses
Direct materials
Direct labor
Variable overhead:
Fixed overhead
Exercise 6-11 (Algo) Part 1
1. Prepare the current-year income statement using variable costing.
Sales
Less: Variable expenses
Income
$ 32 per unit
$4,700,000 per year
$ 60 per unit
$82 per unit
$ 48 per unit
$ 10,744,000 per year
Exercise 6-11 (Algo) Part 2
OAK MART
Income Statement (Variable Costing)
Income
$ 57,120,000
2. Prepare the current-year income statement using absorption costing.
OAK MART
Income Statement (Absorption Costing)
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