Question 5.2 Tundra Tack manufactures horse saddles. In 2015, fixed overheadwas applied to products at the rate of $9 per unit. Variable cost perunit remained constant throughout the year. In September 2015,income under variable costing was $195,000. September's beginningand ending inventories were 18,500 and 9,700 units, respectively.a. Calculate income under absorption costing assuming no variances.b. Assume instead that the company's September beginning andending inventories were 10,200 and 13,800 units, respectively.Calculate income under absorption costing.

Concept of Absorption CostingAbsorption costing is a costing method where all manufacturing costs,…

Answered: Tundra Tack manufactures horse saddles.…

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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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.
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.
Using the information in the previous exercises about Marleys Manufacturing, determine the operating income for department B, assuming department A sold department B 1,000 units during the month and department A reduces the selling price to the market price.
On April 30, the end of the first month of operations, Joplin Company prepared the following income statement, based on the absorption costing concept: If the fixed manufacturing costs were 450,000 and the fixed selling and administrative expenses were 165,000, prepare an income statement according to the variable costing concept.
Potter Company has installed a JIT purchasing and manufacturing system and is using back-flush accounting for its cost flows. It currently uses a two-trigger approach with the purchase of materials as the first trigger point and the completion of goods as the second trigger point. During the month of June, Potter had the following transactions: 40,500 labor plus 222,750 overhead. There were no beginning or ending inventories. All goods produced were sold with a 60 percent markup. Any variance is closed to Cost of Goods Sold. (Variances are recognized monthly.) Required: Prepare the journal entries for the month of June using backflush costing, assuming that Potter uses the sale of goods as the second trigger point instead of the completion of goods.
At the beginning of the year, Lopez Company had the following standard cost sheet for one of its chemical products: Lopez computes its overhead rates using practical volume, which is 80,000 units. The actual results for the year are as follows: (a) Units produced: 79,600; (b) Direct labor: 158,900 hours at 18.10; (c) FOH: 831,000; and (d) VOH: 112,400. Required: 1. Compute the variable overhead spending and efficiency variances. 2. Compute the fixed overhead spending and volume variances.
Tundra Tack manufactures horse saddles. In 2015, fixed overhead was applied to products at the rate of $9 per unit. Variable cost per unit remained constant throughout the year. In September 2015, income under variable costing was $195,000. September's beginning and ending inventories were 18,500 and 9,700 units, respectively. a. Calculate income under absorption costing assuming no variances. b. Assume instead that the company's September beginning and ending inventories were 10,200 and 13,800 units, respectively. Calculate income under absorption costing.
Calculate income under absorption costing?
Maney Televisions utilizes a traditional overhead allocation method, and has determined that overhead costs are driven by direct labor hours. Relevant cost information is provided below. Total estimated overhead costs $650,000 Total estimated DL hours 130,000 Actual overhead costs $640,300 Actual DL hours 127,500 The unadjusted cost of goods sold balance at the end of the year is $56,000. What is the overhead variance? Please provide your answer as a positive number rounded to the nearest whole dollar.
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:
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,…
Glory, Inc. has collected the following data for November (there are no beginning inventories): (Click the icon to view the data.) Read the requirements. Requirement 1. Using variable costing, calculate the unit product cost. (Round your final answer to the nearest cent.) Variable costing 173 Unit product cost Requirement 2. Prepare an income statement using the contribution margin format. Glory, Inc. Income Statement (Variable Costing) For the Month Ended November 30 Net Sales Revenue. Variable Costs: Variable Cost of Goods Sold Variable Selling and Administrative Costs Contribution Margin Fixed Costs: Fixed Manufacturing Overhead Fixed Selling and Administrative Costs Operating Income 60550 8400 6300 4750 105000 13150 31300

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