Writer One Inc. manufactures ball point pens that sell at wholesale for $0.80 per unit. Budgetedproduction in both 2015 and 2016 was 8,000 units. There was no beginning inventory in 2015.The following data summarized the 2015 and 2016 operations:20152016Units soldUnits produced9,0008,0006,5008,000Costs:Variable factory overhead per unit$0.20 $0.20Fixed factory overhead$1,200 $1,200Variable marketing per unitFixed Selling and Administrative$0.30$0.30$320$320Find variable costing operating income for the year 2015.

Actual sales made for the year only has to be taken for computation for net operating income for the…

Writer One Inc. manufactures ball point pens that sell at wholesale for $0.80 per unit. Budgeted production in both 2015 and 2016 was 8,000 units. There was no beginning inventory in 2015. The following data summarized the 2015 and 2016 operations: 2015 2016 Units sold Units produced 6,500 9,000 8,000 8,000 Costs: Variable factory overhead per unit Fixed factory overhead Variable marketing per unit Fixed Selling and Administrative $0.20 $0.20 $1,200 $1,200 $0.30 $0.30 $320 $320 Find variable costing operating income for the year 2015.

Writer One Inc. manufactures ball point pens that sell at wholesale for $0.80 per unit. Budgeted production in both 2015 and 2016 was 8,000 units. There was no beginning inventory in 2015. The following data summarized the 2015 and 2016 operations: 2015 2016 Units sold Units produced 6,500 9,000 8,000 8,000 Costs: Variable factory overhead per unit Fixed factory overhead Variable marketing per unit Fixed Selling and Administrative $0.20 $0.20 $1,200 $1,200 $0.30 $0.30 $320 $320 Find variable costing operating income for the year 2015.

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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as Great Outdoze Company manufactures sleeping bags, which sell for $67.00 each. The variable costs of production are as follows: $18.20 9.10 7.00 Direct material Direct labor Variable manufacturing overhead Budgeted fixed overhead in 20x1 was $160,000 and budgeted production was 20,000 sleeping bags. The year's actual production was 20,000 units, of which 16,700 were sold. Variable selling and administrative costs were $1.90 per unit sold; fixed selling and administrative costs were $25,000. Required: 1. Calculate the product cost per sleeping bag under (a) absorption costing and (b) variable costing. 2-a. Prepare an operating income statement for the year using absorption costing. 2-b. Prepare an operating income statement for the year using variable costing. 3. Reconcile reported operating income under the two methods using the shortcut method.
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