Yale Company manufactures hair brushes that sell at wholesale for $3 per unit. The company had no beginning inventory in the prior year. These data summarize the current and prior year operations: Sales (000s) Production (000s) Production cost Factory-variable (per unit) -fixed (000s) Marketing-variable (per unit) Administrative-fixed (000s) Prior Year 2,300 units 3,000 units $ 0.60 $ 1,500 $ 0.40 $ 500 Current Year 3,700 units 3,000 units $ 0.60 $ 1,500 $ 0.40 $ 500 Required: 1. Prepare an income statement for each year based on full costing. 2. Prepare an income statement for each year based on variable costing. 3. Prepare a reconciliation of the difference each year in the operating income resulting from using the full costing method and variable costing method.

Yale Company manufactures hair brushes that sell at wholesale for $3 per unit. The company had no beginning inventory in the prior year. These data summarize the current and prior year operations: Sales (000s) Production (000s) Production cost Factory-variable (per unit) -fixed (000s) Marketing-variable (per unit) Administrative-fixed (000s) Prior Year 2,300 units 3,000 units $ 0.60 $ 1,500 $ 0.40 $ 500 Current Year 3,700 units 3,000 units $ 0.60 $ 1,500 $ 0.40 $ 500 Required: 1. Prepare an income statement for each year based on full costing. 2. Prepare an income statement for each year based on variable costing. 3. Prepare a reconciliation of the difference each year in the operating income resulting from using the full costing method and variable costing method.

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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Ida Company produces a handcrafted musical instrument called a gamelan that is similar to a xylophone. The gamelans are sold for $845, Selected data for the company's operations last year follow: Units in beginning inventory Units produced Units sold Units in ending inventory Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs : Fixed manufacturing overhead Fixed selling and administrative 19,000 16,000 3,000 $ 260 $ 340 $ 57 $ 22 $ 910,000 $ 930,000 Required: 1. Assume that the company uses absorption costing. Compute the unit product cost for one gamelan. (Round your intermediate calculations and final answer to the nearest whole dollar amount.) 2. Assume that the company uses variable costing. Compute the unit product cost for one gahelan. 1. Absorption costing unit product cost 2. Variable costing unit product cost
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Yale Company manufactures hair brushes that sell at wholesale for $3 per unit. The company had no beginning inventory in the prior year. These data summarize the current and prior year operations: Prior Year Current Year Sales (000s) 2,300 units 3, 700 units Production (000s) 3,000 units 3,000 units Production cost Factory-variable (per unit) $ 0.60 $ 0.60 —fixed (000s ) $ 1,500 $1,500 Marketing-variable (per unit) $ 0.40 $ 0.40 Administrative-fixed (000s) $ 500 $ 500 Required: 1. Prepare an income statement for each year based on full costing. 2. Prepare an income statement for each year based on variable costing. 3. Prepare a reconciliation of the difference each year in the operating income resulting from using the full costing method and variable costing method.Complete this question by entering your answers in the tabs below. Required 1 Prepare an income statement for each year based on full costing. (Enter your answers in thousands of dollars.)
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sanjay
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