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The Dorset Corporation produces and sells a single product. The following data refer to the year just completed: Beginning inventory Units produced Units sold Selling price per unit Selling and administrative expenses: Variable per unit 0 30,300 24,700 $ 465 $ 25 Fixed per year $ 469,300 Manufacturing costs: Direct materials cost per unit $ 211 Direct labor cost per unit $ 53 Variable manufacturing overhead cost per unit $ 36 $ 454,500 Fixed manufacturing overhead per year Assume that direct labor is a variable cost. Required: a. Compute the unit product cost under both the absorption costing and variable costing approaches. b. Prepare an income statement for the year using absorption costing. c. Prepare an income statement for the year using variable costing. d. Reconcile the absorption costing and variable costing net operating income figures in (b) and (c) above. Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Prepare an income statement for the year using variable costing. Sales Variable expenses: Variable Costing Income Statement Variable cost of goods sold $ 7,410,000 Variable selling and administrative expenses 617,500 Fixed expenses: Fixed manufacturing overhead 454,500 $11,485,500 8,027,500 3,458,000 Fixed selling and administrative expenses 469,300 Net operating income 923,800 2,534,200 < Required B Required D >

The Dorset Corporation produces and sells a single product. The following data refer to the year just completed: Beginning inventory Units produced Units sold Selling price per unit Selling and administrative expenses: Variable per unit 0 30,300 24,700 $ 465 $ 25 Fixed per year $ 469,300 Manufacturing costs: Direct materials cost per unit $ 211 Direct labor cost per unit $ 53 Variable manufacturing overhead cost per unit $ 36 $ 454,500 Fixed manufacturing overhead per year Assume that direct labor is a variable cost. Required: a. Compute the unit product cost under both the absorption costing and variable costing approaches. b. Prepare an income statement for the year using absorption costing. c. Prepare an income statement for the year using variable costing. d. Reconcile the absorption costing and variable costing net operating income figures in (b) and (c) above. Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Prepare an income statement for the year using variable costing. Sales Variable expenses: Variable Costing Income Statement Variable cost of goods sold $ 7,410,000 Variable selling and administrative expenses 617,500 Fixed expenses: Fixed manufacturing overhead 454,500 $11,485,500 8,027,500 3,458,000 Fixed selling and administrative expenses 469,300 Net operating income 923,800 2,534,200 < Required B Required D >

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter2: Basic Managerial Accounting Concepts
Section: Chapter Questions
Problem 39E: Cost Classification Loring Company incurred the following costs last year: Required: 1. Classify...
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The Dorset Corporation produces and sells a single product. The following data refer to the year just completed: Beginning inventory Units produced Units sold Selling price per unit Selling and administrative expenses: Variable per unit 0 30,300 24,700 $ 465 $ 25 Fixed per year $ 469,300 Manufacturing costs: Direct materials cost per unit $ 211 Direct labor cost per unit $ 53 Variable manufacturing overhead cost per unit $ 36 $ 454,500 Fixed manufacturing overhead per year Assume that direct labor is a variable cost. Required: a. Compute the unit product cost under both the absorption costing and variable costing approaches. b. Prepare an income statement for the year using absorption costing. c. Prepare an income statement for the year using variable costing. d. Reconcile the absorption costing and variable costing net operating income figures in (b) and (c) above. Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Prepare an income statement for the year using variable costing. Sales Variable expenses: Variable Costing Income Statement Variable cost of goods sold $ 7,410,000 Variable selling and administrative expenses 617,500 Fixed expenses: Fixed manufacturing overhead 454,500 $11,485,500 8,027,500 3,458,000 Fixed selling and administrative expenses 469,300 Net operating income 923,800 2,534,200 < Required B Required D >
Transcribed Image Text:The Dorset Corporation produces and sells a single product. The following data refer to the year just completed: Beginning inventory Units produced Units sold Selling price per unit Selling and administrative expenses: Variable per unit 0 30,300 24,700 $ 465 $ 25 Fixed per year $ 469,300 Manufacturing costs: Direct materials cost per unit $ 211 Direct labor cost per unit $ 53 Variable manufacturing overhead cost per unit $ 36 $ 454,500 Fixed manufacturing overhead per year Assume that direct labor is a variable cost. Required: a. Compute the unit product cost under both the absorption costing and variable costing approaches. b. Prepare an income statement for the year using absorption costing. c. Prepare an income statement for the year using variable costing. d. Reconcile the absorption costing and variable costing net operating income figures in (b) and (c) above. Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Prepare an income statement for the year using variable costing. Sales Variable expenses: Variable Costing Income Statement Variable cost of goods sold $ 7,410,000 Variable selling and administrative expenses 617,500 Fixed expenses: Fixed manufacturing overhead 454,500 $11,485,500 8,027,500 3,458,000 Fixed selling and administrative expenses 469,300 Net operating income 923,800 2,534,200 < Required B Required D >
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