Income Statements, Variable and Absorption Costing Income Statements, Variable and Absorption CostingThe following information pertains to Vladamir, Inc., for last year:Beginning inventory, units1,500Units produced100,000Units sold101,000Variable costs per unit:Direct materials$8.00Direct labor$9.00Variable overhead$2.00Variable selling expenses$2.00Fixed costs per year:Fixed overhead$300,000Fixed selling and administrative expenses $230,000There are no work-in-process inventories. Normal activity is 100,000 units. Expected and actual overhead costs are the same. Costs have not changed from one year to the next.Required:1. How many units are in ending inventory?units2. Without preparing an income statement, indicate what the difference will be between variable-costing income and absorption-costing income. 3a. Assume the selling price per unit is $30. Prepare an income statement using variable costing.Vladamir, Inc.Variable-Costing Income StatementFor Last YearLess:Contribution marginLess:Operating income3b. Assume the selling price per unit is $30. Prepare an income statement using absorption costing.Vladamir, Inc.Absorption-Costing IncomeStatementFor Last YearGross profitOperating income

The question is based on the concept of Cost Accounting.

The following information pertains to Vladamir, Inc., for last year: Beginning inventory, units 1,500 Units produced 100,000 Units sold 101,000 Variable costs per unit: Direct materials $8.00 Direct labor $9.00 Variable overhead $2.00 Variable selling expenses $2.00

The following information pertains to Vladamir, Inc., for last year: Beginning inventory, units 1,500 Units produced 100,000 Units sold 101,000 Variable costs per unit: Direct materials $8.00 Direct labor $9.00 Variable overhead $2.00 Variable selling expenses $2.00

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Explain the following basic principles in cost management: a. profits b. life cycle costs c.…

A: Cost ManagementCost management is the process of organizing and overseeing a company's spending…

Q: What is Unit-Profit or Unit-Cost Calculation?

A: Cost: It is the economic value of resources incurred by a firm to manufacture a product or render…

Q: Discuss the merits and demerits of the cost volume profit analysis (CVP)

A: Cost volume profit analysis is one of the important concept used in cost accounting. Under this…

Q: Under what conditions is a market-based transfer price most likely to be used?

A: Transfer Pricing: It is termed as the cost which is charged by the one department of the company…

Q: What would be the outputs for the given assumptions: Total revenue: Total costs: Total profit:

A: Break Even Point is that point at which there is no profit & loss would arise. At break even…

Q: What is the standard cost income statement?

Q: Explain the Problems in Cost Accounting Measurements?

Q: Describe analyzing of profit using contribution margin.

A: The contribution margin ratio is the percentage of difference in a company's sales and variable…

Q: List the most important assumptions of cost-volume-profit analysis.

A: Cost Volume Profit Analysis (CVP Analysis): This analysis is helpful in determining that how any…

Q: Assign costs to unitsusing the weighted-averagemethod.

A: Cost: It refers to the economic value incurred by an organization for manufacturing a product or…

Q: Discuss cost-benefit analysis and financial analysis tools

A: Answer: Cost-benefit analysis: It is nothing but a process of decision making that balances the…

Q: How cost accounting covers the problem of price assessment

A: Cost Accounting Cost accounting is also a form of group action accounting that aims to capture a…

Q: Define and explain the concept of cost accounting.

A: Introduction: An essential fee accounting device operates in real-time by monitoring raw materials…

Q: Assume that Sample Company purchased factory equipment on January 1, 2017, for $90,000. The…

A: “Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: Which of the following costs is relevant in decisionmaking? committed costs accounting costs cash…

A: Following is the answer to the given question

Q: What is the standard cost income statement? Give an example?

A: Meaning of Standard cost income statement:A standard cost is the estimated cost of production based…

Q: Describe the account analysis method for estimating a cost function.

A: Definition: Account Analysis Method: The account analysis method of estimating a cost function…

Q: Describe the approaches of target profit.

A: Target Profit: It refers to the desired amount of profit that a company expects to achieve by the…

Q: COSTING METHOD. 1. What is average cost method? 2. What is FIFO cost method?

A: Solution: 1. Average cost method: Average cost method is also known as weighted average method.…

Q: what is weighted average cost method?

A: The weighted average cost method is one of the methods to ascertain the unit cost of a product. It…

Q: What is the purpose of Classifying Costs for Financial Statement?

A: Cost Classifications helps the management in analysing the overall effect on the assets and…

Q: d. Perpetual system, LIFO cost flow. e. Periodic system, weighted-average cost flow. f.…

A: Perpetual inventory system - Movement of inventory is recorded on regular basis. Periodic inventory…

Q: Describe the Unit-Profit or Unit-Cost Calculation?

A: A unit cost is a net expense a firm has incurred to manufacture, store, and sell one unit of a…

Q: Examples of how cost–volume–profit analysis can be used for decision-making.

A: Solution:Cost volume profit analysis represents the impact of change in cost to operating profit. it…

Q: Distinguish between inventoriable costs and period costs.

A: Characterizations of expenses. Inventoriable expenses is characterised as prices that become a part…

Concept explainers

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.

Question

Income Statements, Variable and Absorption Costing

3a. Assume the selling price per unit is $30. Prepare an income statement using variable costing.
Vladamir, Inc.
Variable-Costing Income Statement
For Last Year
Less:
Contribution margin
Less:
Operating income
3b. Assume the selling price per unit is $30. Prepare an income statement using absorption costing.
Vladamir, Inc.
Absorption-Costing Income
Statement
For Last Year
Gross profit
Operating income

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1 Introduction

VIEW

Step 2 Requirement 1

VIEW

Step 3 Requirement 2

VIEW

Step 4 Requirement 3a

VIEW

Step 5 Requirement 3b

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 5 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

How does the contribution margin affect the cost-volume-profit analysis?
Merits and demerits of the cost value profit analysis CVP
What is life-cycle and/or full-cost accounting? IS THERE A DIFFERENCE?
calculate for me the Thotho income statement variable costing
The product cost period cost opertunity cost
Describe how changes in the demand, ordering cost,or holding cost affect the EOQ.
How is cost-volume-profit analysis useful?
Explain Classifying Costs for Predicting Cost Behavior?
Can you label revenue, loss, total costs, dollars, variable cost, and fixed cost on the provided chart?
What are “initial direct costs” and how are they accountedfor?
Flingen Inc. reveals the following information in their annual report for FY 2021 Selected Income Statement Items: Sales $10,500,000 Cost of goods sold $5,500,000 Pretax earnings $650,000 Selected Balance Sheet Items: Merchandise inventory $800,000 Total assets $2,500,000 Upper management plans to cut cost of goods sold by 4.5% for the coming year but retain the same sales and weeks of inventory. What is the return on assets estimated to be for 2022? Group of answer choices 33.7% 32.1% 36.8% 34.1%
Current Cost Concept - Measurement of Elements Why is Accounts Payable one of the elements that is normally presented at current cost? Please explain.