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Wiengot Antennas, Inc. produces and sells a unique type of TV antenna; The company has just opened a new plant to manufacture the antenna and the following cost and revenue data have been provided for the first month of the plant's operation in the form of a worksheet. A B 1 Beginning inventory 2 Units produced 3 Units sold 40,000 35,000 4 Selling price per unit $60 5 6 Selling and administrative expenses: Variable per unit Fixed (total) 9 Manufacturing costs 7 $2 8 $560,000 10 Direct materials cost per unit $15 $7 $2 11 Direct labor cost per unit 12 Variable manufacturing overhead cost per unit 13 Fixed manufacturing overhead cost (total) $640,000 14 4M Sheet1 Sheet2 Sheet3 Because the new antenna is unique in design, management is anxious to see how profitable it will be and has asked that an income statement be prepared for the month.

Wiengot Antennas, Inc. produces and sells a unique type of TV antenna; The company has just opened a new plant to manufacture the antenna and the following cost and revenue data have been provided for the first month of the plant's operation in the form of a worksheet. A B 1 Beginning inventory 2 Units produced 3 Units sold 40,000 35,000 4 Selling price per unit $60 5 6 Selling and administrative expenses: Variable per unit Fixed (total) 9 Manufacturing costs 7 $2 8 $560,000 10 Direct materials cost per unit $15 $7 $2 11 Direct labor cost per unit 12 Variable manufacturing overhead cost per unit 13 Fixed manufacturing overhead cost (total) $640,000 14 4M Sheet1 Sheet2 Sheet3 Because the new antenna is unique in design, management is anxious to see how profitable it will be and has asked that an income statement be prepared for the month.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Wiengot Antennas, Inc. produces and sells a unique type of TV antenna; The company has just opened a new plant to manufacture the antenna and the following cost and revenue data have been provided for the first month of the plant's operation in the form of a worksheet. A B 1 Beginning inventory 2 Units produced 40,000 3 Units sold 35,000 4 Selling price per unit $60 5 6 Selling and administrative expenses: Variable per unit 7 $2 Fixed (total) $560,000 9 Manufacturing costs Direct materials cost per unit 10 $15 11 Direct labor cost per unit $7 $2 Variable manufacturing overhead cost per unit Fixed manufacturing overhead cost (total) 12 13 $640,000 14 K 1 Sheeti Sheet2Sheet3 Because the new antenna is unique in design, management is anxious to see how profitable it will be and has asked that an income statement be prepared for the month.
Transcribed Image Text:Wiengot Antennas, Inc. produces and sells a unique type of TV antenna; The company has just opened a new plant to manufacture the antenna and the following cost and revenue data have been provided for the first month of the plant's operation in the form of a worksheet. A B 1 Beginning inventory 2 Units produced 40,000 3 Units sold 35,000 4 Selling price per unit $60 5 6 Selling and administrative expenses: Variable per unit 7 $2 Fixed (total) $560,000 9 Manufacturing costs Direct materials cost per unit 10 $15 11 Direct labor cost per unit $7 $2 Variable manufacturing overhead cost per unit Fixed manufacturing overhead cost (total) 12 13 $640,000 14 K 1 Sheeti Sheet2Sheet3 Because the new antenna is unique in design, management is anxious to see how profitable it will be and has asked that an income statement be prepared for the month.
Required: 1. Assume that the company uses absorption costing. a. Determine the unit product cost. b. Prepare an income statement for the month. 2. Assume that the company uses variable costing. a. Determine the unit product cost. b. Prepare a contribution format income statement for the month. 3. Explain the reason for any difference in the ending inventory balances under the two costing methods and the impact of this difference on reported net operating income.
Transcribed Image Text:Required: 1. Assume that the company uses absorption costing. a. Determine the unit product cost. b. Prepare an income statement for the month. 2. Assume that the company uses variable costing. a. Determine the unit product cost. b. Prepare a contribution format income statement for the month. 3. Explain the reason for any difference in the ending inventory balances under the two costing methods and the impact of this difference on reported net operating income.
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