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 >
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
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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