Variable and Absorption Costing Grant Company sells its product for $53 per unit. Variable manufacturing costs per unit are $32, and fixed manufacturing costs at the normal operating level of 18,000 units are $90,000. Variable selling expenses are $4 per unit sold. Fixed administrative expenses total $155,000. Grant had 7,000 units at a per-unit cost of $37 in beginning inventory in 2016. During 2016, the company produced 18,000 units and sold 20,000. Would net income for Grant Company in 2016 be higher if calculated using variable costing or using absorption costing? Calculate reported income using each method. Do not use negative signs with any answers. Absorption Costing Income Statement Sales Answer Cost of Goods Sold: Beginning Inventory Answer Variable Costs Answer Fixed Costs Answer Less: Ending Inventory Answer Cost of Goods Sold Answer AnswerContribution marginGross profitLess: Ending inventoryManufacturing costSelling expenseVariable selling expense Answer AnswerContribution marginGross profitLess: Ending inventoryManufacturing costSelling expenseVariable selling expense Answer Administrative expense Answer Net Income Answer Variable Costing Income Statement Sales Answer Cost of Goods Sold: Beginning Inventory Answer Variable Costs Answer AnswerContribution marginGross profitLess: Ending inventoryManufacturing costSelling expenseVariable selling expense Answer Variable cost of goods sold Answer AnswerContribution marginGross profitLess: Ending inventoryManufacturing costSelling expenseVariable selling expense Answer AnswerContribution marginGross profitLess: Ending inventoryManufacturing costSelling expenseVariable selling expense Answer Fixed costs: AnswerContribution marginGross profitLess: Ending inventoryManufacturing costSelling expenseVariable selling expense Answer Administrative Expense Answer Total Fixed Cost Answer Net Income

Variable and Absorption Costing Grant Company sells its product for $53 per unit. Variable manufacturing costs per unit are $32, and fixed manufacturing costs at the normal operating level of 18,000 units are $90,000. Variable selling expenses are $4 per unit sold. Fixed administrative expenses total $155,000. Grant had 7,000 units at a per-unit cost of $37 in beginning inventory in 2016. During 2016, the company produced 18,000 units and sold 20,000. Would net income for Grant Company in 2016 be higher if calculated using variable costing or using absorption costing? Calculate reported income using each method. Do not use negative signs with any answers. Absorption Costing Income Statement Sales Answer Cost of Goods Sold: Beginning Inventory Answer Variable Costs Answer Fixed Costs Answer Less: Ending Inventory Answer Cost of Goods Sold Answer AnswerContribution marginGross profitLess: Ending inventoryManufacturing costSelling expenseVariable selling expense Answer AnswerContribution marginGross profitLess: Ending inventoryManufacturing costSelling expenseVariable selling expense Answer Administrative expense Answer Net Income Answer Variable Costing Income Statement Sales Answer Cost of Goods Sold: Beginning Inventory Answer Variable Costs Answer AnswerContribution marginGross profitLess: Ending inventoryManufacturing costSelling expenseVariable selling expense Answer Variable cost of goods sold Answer AnswerContribution marginGross profitLess: Ending inventoryManufacturing costSelling expenseVariable selling expense Answer AnswerContribution marginGross profitLess: Ending inventoryManufacturing costSelling expenseVariable selling expense Answer Fixed costs: AnswerContribution marginGross profitLess: Ending inventoryManufacturing costSelling expenseVariable selling expense Answer Administrative Expense Answer Total Fixed Cost Answer Net Income

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Variable and Absorption Costing
Grant Company sells its product for $53 per unit. Variable manufacturing costs per unit are $32, and fixed manufacturing costs at the normal operating level of 18,000 units are $90,000. Variable selling expenses are $4 per unit sold. Fixed administrative expenses total $155,000. Grant had 7,000 units at a per-unit cost of $37 in beginning inventory in 2016. During 2016, the company produced 18,000 units and sold 20,000. Would net income for Grant Company in 2016 be higher if calculated using variable costing or using absorption costing?

Calculate reported income using each method.
Do not use negative signs with any answers.

Absorption Costing Income Statement
Sales		Answer
Cost of Goods Sold:
Beginning Inventory	Answer
Variable Costs	Answer
Fixed Costs	Answer
Less: Ending Inventory	Answer
Cost of Goods Sold		Answer
AnswerContribution marginGross profitLess: Ending inventoryManufacturing costSelling expenseVariable selling expense		Answer
AnswerContribution marginGross profitLess: Ending inventoryManufacturing costSelling expenseVariable selling expense		Answer
Administrative expense		Answer
Net Income		Answer

Variable Costing Income Statement
Sales		Answer
Cost of Goods Sold:
Beginning Inventory	Answer
Variable Costs	Answer
AnswerContribution marginGross profitLess: Ending inventoryManufacturing costSelling expenseVariable selling expense	Answer
Variable cost of goods sold		Answer
AnswerContribution marginGross profitLess: Ending inventoryManufacturing costSelling expenseVariable selling expense		Answer
AnswerContribution marginGross profitLess: Ending inventoryManufacturing costSelling expenseVariable selling expense		Answer
Fixed costs:
AnswerContribution marginGross profitLess: Ending inventoryManufacturing costSelling expenseVariable selling expense	Answer
Administrative Expense	Answer
Total Fixed Cost		Answer
Net Income		Answer

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