Variable Costing, Value of Ending Inventory, Operating Income Pattison Products, Inc., began operations in October and manufactured 46,000 units during the month with the following unit costs: Direct materials $5.50 Direct labor 3.50 Variable overhead 1.75 Fixed overhead* 7.50 Variable marketing cost 1.45 * Fixed overhead per unit = $345,000 / 46,000 units produced = $7.50 Total fixed factory overhead is $345,000 per month. During October, 44,700 units were sold at a price of $25.75, and fixed marketing and administrative expenses were $128,000. 3. Prepare a variable-costing income statement for Pattison Products, Inc., for the month of October. 4. 4. What if November production was 46,000 units, costs were stable, and sales were 47,000 units? What is the cost of ending inventory? If an amount is zero, enter "O" What is operating income for November?
Variable Costing, Value of Ending Inventory, Operating Income Pattison Products, Inc., began operations in October and manufactured 46,000 units during the month with the following unit costs: Direct materials $5.50 Direct labor 3.50 Variable overhead 1.75 Fixed overhead* 7.50 Variable marketing cost 1.45 * Fixed overhead per unit = $345,000 / 46,000 units produced = $7.50 Total fixed factory overhead is $345,000 per month. During October, 44,700 units were sold at a price of $25.75, and fixed marketing and administrative expenses were $128,000. 3. Prepare a variable-costing income statement for Pattison Products, Inc., for the month of October. 4. 4. What if November production was 46,000 units, costs were stable, and sales were 47,000 units? What is the cost of ending inventory? If an amount is zero, enter "O" What is operating income for November?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Variable Costing, Value of Ending Inventory, Operating Income
Pattison Products, Inc., began operations in October and manufactured 46,000 units during the month with the following unit costs:
Direct materials
$5.50
Direct labor
3.50
Variable overhead
1.75
Fixed overhead*
7.50
Variable marketing cost
1.45
* Fixed overhead per unit = $345,000 / 46,000 units produced = $7.50
Total fixed factory overhead is $345,000 per month. During October, 44,700 units were sold at a price of $25.75, and fixed marketing and administrative expenses were $128,000.
3. Prepare a variable-costing income statement for Pattison Products, Inc., for the month of October.
4. 4. What if November production was 46,000 units, costs were stable, and sales were 47,000 units? What is the cost of ending inventory? If an amount is zero, enter "O"
What is operating income for November?
Transcribed Image Text:Variable Costing, Value of Ending Inventory, Operating Income
Pattison Products, Inc., began operations in October and manufactured 46,000 units during the month with the following unit costs:
Direct materials
$5.50
Direct labor
3.50
Variable overhead
1.75
Fixed overhead"
7.50
Variable marketing cost
1.45
Fixed overhead per unit = $345,000 / 46,000 units produced = $7.50
Total fixed factory overhead is $345,000 per month. During October, 44,700 units were sold at a price of $25.75, and fixed marketing and administrative expenses were $128,000.
Required:
1. Calculate the cost of each unit using variable costing. Round your final answer to the nearest cent.
per unit
2. How many units remain in ending inventory?
units
What is the cost of ending inventory using variable costing?
3. Prepare a variable-costing income statement for Pattison Products, Inc., for the month of October.
Pattison Products, Inc.
Variable-Costing Income
Statement
For the Month of October
Transcribed Image Text:What is the cost of ending inventory using variable costing?
3. Prepare a variable-costing income statement for Pattison Products, Inc., for the month of October.
Pattison Products, Inc.
Variable-Costing Income
Statement
For the Month of October
Less:
Contribution margin
Less:
Operating income
4. What if November production was 46,000 units, costs were stable, and sales were 47,000 units? What is the cost of ending inventory? If an amount is zero, enter "0".
What is operating income for November?
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