Viviana's Foods produces frozen meals that it sells for $15 each. The company computes a new monthly fixed manufacturing overhead allocation rate based on the planned number of meals to be produced that month. Assume all costs and production levels are exactly as planned. The following data are from Viviana's Foods's first month in business: (Click the icon to view the data.) Read the requirements. Requirement 1. Compute the product cost per meal produced under absorption costing and under variable costing. (Round your answers to the nearest cent.) Variable costing Absorption costing Total product cost per meal Requirement 2a. Prepare Viviana's Foods's January income statement using absorption costing. Viviana's Foods Income Statement (Absorption Costing) Month Ended January 31 Operating Income Requirement 2b. Prepare Viviana's Foods's January income statement using variable costing. Viviana's Foods Income Statement (Variable Costing) Month Ended January 31 Operating Income Requirement 3. Is operating income higher under absorption costing or variable costing January? In January, absorption costing operating income variable costing operating income. Data table Units produced and sold: Sales Production Variable manufacturing cost per meal Sales commission cost per meal Total fixed manufacturing overhead Total fixed selling and administrative costs Print $ Done January 800 meals 1,100 meals 6 3 385 800 X
Viviana's Foods produces frozen meals that it sells for $15 each. The company computes a new monthly fixed manufacturing overhead allocation rate based on the planned number of meals to be produced that month. Assume all costs and production levels are exactly as planned. The following data are from Viviana's Foods's first month in business: (Click the icon to view the data.) Read the requirements. Requirement 1. Compute the product cost per meal produced under absorption costing and under variable costing. (Round your answers to the nearest cent.) Variable costing Absorption costing Total product cost per meal Requirement 2a. Prepare Viviana's Foods's January income statement using absorption costing. Viviana's Foods Income Statement (Absorption Costing) Month Ended January 31 Operating Income Requirement 2b. Prepare Viviana's Foods's January income statement using variable costing. Viviana's Foods Income Statement (Variable Costing) Month Ended January 31 Operating Income Requirement 3. Is operating income higher under absorption costing or variable costing January? In January, absorption costing operating income variable costing operating income. Data table Units produced and sold: Sales Production Variable manufacturing cost per meal Sales commission cost per meal Total fixed manufacturing overhead Total fixed selling and administrative costs Print $ Done January 800 meals 1,100 meals 6 3 385 800 X
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Viviana's Foods produces frozen meals that it sells for $15 each. The company computes a new monthly fixed manufacturing overhead allocation rate based on the planned number of meals to be produced that month. Assume all costs and production levels are exactly as
planned. The following data are from Viviana's Foods's first month in business:
(Click the icon to view the data.)
Read the requirements.
Requirement 1. Compute the product cost per meal produced under absorption costing and under variable costing. (Round your answers to the nearest cent.)
Variable
costing
Absorption
costing
Total product cost per meal
Requirement 2a. Prepare Viviana's Foods's January income statement using absorption costing.
Viviana's Foods
Income Statement (Absorption Costing)
Month Ended January 31
Operating Income
Requirement 2b. Prepare Viviana's Foods's January income statement using variable costing.
Viviana's Foods
Income Statement (Variable Costing)
Month Ended January 31
Operating Income
Requirement 3. Is operating income higher under absorption costing or variable costing in January?
In January, absorption costing operating income
variable costing operating income.
Data table
Units produced and sold:
Sales
Production
Variable manufacturing cost per meal
Sales commission cost per meal
Total fixed manufacturing overhead
Total fixed selling and administrative costs
Print
Done
$
January
800 meals
1,100 meals
6
3
385
800
X
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