Help pl Required informationExercise 6-3 (Algo) Income statement under absorption costing and variable costing LO P1, P2[The following information applies to the questions displayed below.]Cool Sky reports the following for its first year of operations. The company produced 46,000 units and sold 38,000 unitsat a price of $130 per unit.Direct materials.Direct laborVariable overheadFixed overheadVariable selling and administrative expensesFixed selling and administrative expensesExercise 6-3 (Algo) Part 1a1a. Assume the company uses absorption costing. Determine its total product cost per unit.Per unit product cost using:Total product cost per unitExercise 6-3 (Algo) Part 1bAbsorption costingExercise 6-3 (Algo) Part 2aIncome Statement (Absorption Costing)Per unit product cost using:1b. Assume the company uses absorption costing. Prepare its income statement for the year under absorption costing.Total product cost per unitPrevExercise 6-3 (Algo) Part 2bIncome1 2 3 4 of 4< Prev2a. Assume the company uses variable costing. Determine its total product cost per unit.VariablecostingS2 3 4< PrevIncome Statement (Variable Costing)$ 54 per unit$ 20 per unit$6 per unit$ 506,000 per year$10 per unit$ 115,000 per year< PrevS +Next >of 4 HH Next >2b. Assume the company uses variable costing. Prepare its income statement for the year under variable costing.of 4S3 4 of 4‒‒‒Next >Next

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Description: Help pl Required informationExercise 6-3 (Algo) Income statement under absorption costing and variable costing LO P1, P2[The following information applies to the questions displayed below.]Cool Sky reports the following for its first year of operatio

The income statement is prepared using various methods as variable and absorption costing. The…

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[The following information applies to the questions displayed below.] Cool Sky reports the following for its first year of operations. The company produced 46,000 units and sold 38,000 at a price of $130 per unit. Direct materials Direct labor Variable overhead Fixed overhead Variable selling and administrative expenses Fixed selling and administrative expenses $ 54 per unit $20 per unit $6 per unit $ 506,000 per year $10 per unit $ 115.000 per year

[The following information applies to the questions displayed below.] Cool Sky reports the following for its first year of operations. The company produced 46,000 units and sold 38,000 at a price of $130 per unit. Direct materials Direct labor Variable overhead Fixed overhead Variable selling and administrative expenses Fixed selling and administrative expenses $ 54 per unit $20 per unit $6 per unit $ 506,000 per year $10 per unit $ 115.000 per year

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter5: Process Costing

Section: Chapter Questions

Problem 2PB: The following product costs are available for Kellee Company on the production of eyeglass frames:...

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The following product costs are available for Kellee Company on the production of eyeglass frames: direct materials, $32,125; direct labor, $23.50; manufacturing overhead, applied at 225% of direct labor cost; selling expenses, $22,225; and administrative expenses, $31,125. The direct labor hours worked for the month are 3,200 hours. A. What are the prime costs? B. What are the conversion costs? C. What is the total product cost? D. What is the total period cost? E. If 6.425 equivalent units are produced, what is the equivalent material cost per unit? F. What is the equivalent conversion cost per unit?
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.
Summarized data for Walrus Co. for its first year of operations are: A. Prepare an income statement under absorption costing B. Prepare an income statement under variable costing
Wrappers Tape makes two products: Simple and Removable. It estimates it will produce 369,991 units of Simple and 146,100 of Removable, and the overhead for each of its cost pools is as follows: It has also estimated the activities for each cost driver as follows: Â How much is the overhead allocated to each unit of Simple and Removable?
Cushing, Inc., costs products using a normal costing system. The following data are available for last year: Overhead is applied on the basis of direct labor hours. What was last years per unit product cost? a. 1.39 b. 4.40 c. 4.43 d. 3.01
Summarized data for Backdraft Co. for its first year of operations are as follows: A. Prepare an income statement under absorption costing B. Prepare an income statement under variable costing
Absorption and variable costing income statements During the first month of operations ended July 31, YoSan Inc. manufactured 2,400 flat panel televisions, of which 2,000 were sold. Operating data for the month are summarized as follows: Instructions 1. Prepare an income statement based on the absorption costing concept. 2. Prepare an income statement based on the variable costing concept. 3. Explain the reason for the difference in the amount of operating income reported in (1) and (2).
Variable-Costing and Absorption-Costing Income Borques Company produces and sells wooden pallets that are used for moving and stacking materials. The operating costs for the past year were as follows: During the year, Borques produced 200,000 wooden pallets and sold 204,300 at 9 each. Borques had 8,200 pallets in beginning finished goods inventory; costs have not changed from last year to this year. An actual costing system is used for product costing. Required: 1. What is the per-unit inventory cost that is acceptable for reporting on Borquess balance sheet at the end of the year ? How many units are in ending inventory? What is the total cost of ending inventory? 2. Calculate absorption-costing operating income. 3. CONCEPTUAL CONNECTION What would the per-unit inventory cost be under variable costing? Does this differ from the unit cost computed in Requirement 1? Why? 4. Calculate variable-costing operating income. 5. Suppose that Borques Company had sold 196,700 pallets during the year. What would absorption-costing operating income have been? Variable-costing operating income?
Absorption and variable costing income statements for two months and analysis During the first month of operations ended July 31, Head Gear Inc. manufactured 6,400 hats, of which 5,200 were sold. Operating data for the month are summarized as follows: During August, Head Gear Inc. manufactured 4,000 hats and sold 5,200 hats. Operating data for August are summarized as follows: Instructions 1. Using the absorption costing concept, prepare income statements for (a) July and (b) August. 2. Using the variable costing concept, prepare income statements for (a) July and (b) August. 3. A. Explain the reason for the differences in the amount of operating income in (1) and (2) for July. B. Explain the reason for the differences in the amount of operating income in (1) and (2) for August. 4. Based on your answers to (1) and (2), did Head Gear Inc. operate more profitably in July or in August? Explain.
Allocating selling and administrative expenses using activity-based costing Shrute Inc. manufactures office copiers, which are sold to retailers. The price and cost of goods sold for each copier are as follows: In addition, the company incurs selling and administrative expenses of 414,030. The company wishes to assign these costs to its three major retail customers, The Warehouse, Kosmo Co., and Supply Universe. These expenses are related to its three major nonmanufacturing activities: customer service, sales order processing, and advertising support. The advertising support is in the form of advertisements that are placed by Shrute Inc. to support the retailers sale of Shrute copiers to consumers. The budgeted activity costs and activity bases associated with these activities are: Activity-base usage and unit volume information for the three customers is as follows: Instructions Determine the activity rates for each of the three nonmanufacturing activities. Determine the activity costs allocated to the three customers, using the activity rates in (1). Construct customer profitability reports for the three customers, dated for the year ended December 31, using the activity costs in (2). The reports should disclose the gross profit and operating income associated with each customer. Provide recommendations to management, based on the profitability reports in (3).
Absorption-Costing Income Statement Refer to the data for Osterman Company above. Required: 1. Calculate the cost of goods sold under absorption costing. 2. Prepare an income statement using absorption costing. Use the following information for Brief Exercises 3-23 and 3-24: During the most recent year, Osterman Company had the following data:
Identify cost graphs The following cost graphs illustrate various types of cost behavior: For each of the following costs, identify the cost graph that best illustrates its cost behavior as the number of units produced increases: A. Total direct materials cost B. Electricity costs of 1,000 per month plus 0.10 per kilowatt-hour C. Per-unit cost of straight-line depreciation on factory equipment D. Salary of quality control supervisor, 20,000 per month E. Per-unit direct labor cost