Calculate income under absorption costing? Tennessee Tack manufactures horse blankets. In 2010, fixedoverhead was applied to products at the rate of $8 per unit.Variable cost per unit remained constant throughout the year.In July 2010, income under variable costing was $188,000.July's beginning and ending inventories were 20,000 and10,400 units, respectively.a. Calculate income under absorption costing assuming novariances.b. Assume instead that the company's July beginning andending inventories were 9,000 and 12,000 units, respectively.Calculate income under absorption costing.

Step 1: Definition of Absorption CostingAbsorption costing is a method of inventory valuation that…

Answered: Tennessee Tack manufactures horse…

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter10: Cost Analysis For Management Decision Making

Section: Chapter Questions

Problem 3P

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Income Statements under Absorption and Variable Costing In the coming year, Kalling Company expects to sell 28,700 units at 32 each. Kallings controller provided the following information for the coming year: Required: 1. Calculate the cost of one unit of product under absorption costing. 2. Calculate the cost of one unit of product under variable costing. 3. Calculate operating income under absorption costing for next year. 4. Calculate operating income under variable costing for next year.
The following data were adapted from a recent income statement of Caterpillar Inc. (CAT) for the year ended December 31: Assume that 8,500 million of cost of goods sold and 4,000 million of selling, administrative, and other expenses were fixed costs. Inventories at the beginning and end of the year were as follows: Also, assume that 30% of the beginning and ending inventories were fixed costs. a. Prepare an income statement according to the variable costing concept for Caterpillar Inc. Round numbers to nearest million. b. Explain the difference between the amount of operating income reported under the absorption costing and variable costing concepts. Round numbers to nearest million.
On March 31, the end of the first month of operations, Barnard Inc. manufactured 15,000 units and sold 12,000 units. The following income statement was prepared, based on the variable costing concept: Determine the unit cost of goods manufactured, based on (a) the variable costing concept and (b) the absorption costing concept.
Orman Company produces neon-colored covers for tablets (e.g., iPads). For last year, Orman reported the following: Last year, Orman produced 89,000 units and sold 90,500 units at 10.50 per unit. Required: 1. Prepare a statement of cost of goods manufactured. 2. Prepare an absorption-costing income statement.
SmokeCity, Inc., manufactures barbeque smokers. Based on past experience, SmokeCity has found that its total annual overhead costs can be represented by the following formula: Overhead cost = 543,000 + 1.34X, where X equals number of smokers. Last year, SmokeCity produced 20,000 smokers. Actual overhead costs for the year were as expected. Required: 1. What is the driver for the overhead activity? 2. What is the total overhead cost incurred by SmokeCity last year? 3. What is the total fixed overhead cost incurred by SmokeCity last year? 4. What is the total variable overhead cost incurred by SmokeCity last year? 5. What is the overhead cost per unit produced? 6. What is the fixed overhead cost per unit? 7. What is the variable overhead cost per unit? 8. Recalculate Requirements 5, 6, and 7 for the following levels of production: (a) 19,500 units and (b) 21,600 units. (Round your answers to the nearest cent.) Explain this outcome.
Jellison Company had the following operating data for its first two years of operations: Jellison produced 90,000 units in the first year and sold 80,000. In the second year, it produced 80,000 units and sold 90,000 units. The selling price per unit each year was 12. Jellison uses an actual costing system for product costing. Required: 1. Prepare income statements for both years using absorption costing. Has firm performance, as measured by income, improved or declined from Year 1 to Year 2? 2. Prepare income statements for both years using variable costing. Has firm performance, as measured by income, improved or declined from Year 1 to Year 2? 3. Which method do you think most accurately measures firm performance? Why?
Please give me step by step instruction on how to get cost of goods manufactured using the following: Cost of Goods Manufactured, using Variable and Absorption Costing On June 30, the end of the first year of operations, Johnson Industries, Inc., manufactured 6,100 units and sold 5,200 units. The following income statement was prepared, based on the variable costing concept: Johnson Industries, Inc.Variable Costing Income StatementFor the Year Ended June 30, 2016 Sales $1,300,000 Variable cost of goods sold: Variable cost of goods manufactured $732,000 Less inventory, June 30 108,000 Variable cost of goods sold 624,000 Manufacturing margin $676,000 Variable selling and administrative expenses 156,000 Contribution margin $520,000 Fixed costs: Fixed manufacturing costs $335,500 Fixed selling and administrative expenses 104,000 439,500 Income from operations $80,500 Determine the unit cost of goods manufactured,…
E-trax, Inc. has provided the following financial information for the year: Finished Goods Inventory: Units produced Beginning balance, in units 640 2,800 2,900 540 Units sold Ending balance, in units Production costs: Variable manufacturing costs per unit $65 Total fixed manufacturing costs $56,000 What is the unit product cost for the year using absorption costing?
Wind Fall, a manufacturer of leaf blowers, began operations this year. During this year, the company produced 10,000 leaf blowers and sold 8,500. At year-end, the company reported the following income statement using absorption costing: Sales (8,500 × $45) Cost of goods sold (8,500 × $20) Gross margin Selling and administrative expenses Net income Production costs per leaf blower total $20, which consists of $16 in variable production costs and $4 in fixed production costs (based on the 10,000 units produced). Fifteen percent of total selling and administrative expenses are variable. Compute net income under variable costing. Multiple Choice $158,500 $246,500 $206,500 $382,500 170,000 $212,500 60,000 $152,500 $237.500
KALIBO CORP. prepared the following absorption-costing income statement for the year ended May 31, 2019 Sales (16,000 units) Cost of goods sold Gross margin Selling and administrative expenses Operating income Additional information follows: Selling and administrative expenses include P1.50 of variable cost per unit sold. There was no beginning inventory, and 17,500 units were produced. Variable manufacturing costs were P11 per unit. Actual fixed costs were equal to budgeted fixed costs. REQUIREMENT: Prepare a variable-costing income statement for the same period. P 320,000 216.000 P104,000 46.000 P 58,000 Absorption Costing Income Statement (Conversion from Variable Net Income) 4. LEGAZPI COMPANY manufactures and sells premium tomato juice by the gallon. LEGAZPI just finished its first year of operations. The following data relates to this first year:
What is the absorption costing net operating income for last year on these general accounting question?
In the last reporting period, Harold's Hat Company recorded 100,000 units sold for the first time in the history of the company. The price per unit was $89.99 and variable costs per unit was $36.39. Compute the fixed costs if the operating income is $4,020,000. Do not use units in your final answer (i.e. $ or commas). Answer:

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