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 1,800 units 2,000 units $ 0.60 $ 1,000 $ 0.40 $500 Current Year 2,200 units 2,000 units $ 0.60 $ 1,000 $ 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 1,800 units 2,000 units $ 0.60 $ 1,000 $ 0.40 $500 Current Year 2,200 units 2,000 units $ 0.60 $ 1,000 $ 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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22. Subject :- Accounting
The annual data that follow pertain to Carl's Crazy Eyewear, a manufacturer of swimming goggles. (Carl's Crazy Eyewear had no beginning Finished Goods Inventory in January.) (Click the icon to view the data.) Read the requirements. Data table Number of goggles produced Number of goggles sold Sales price per unit Variable manufacturing cost per unit Sales commission cost per unit Fixed manufacturing overhead Fixed selling and administrative costs Print Done $ 235,000 195,000 30 7 3 940,000 230,000 Requirements 1. Prepare both conventional (absorption costing) and contribution margin (variable costing) income statements for Carl's Crazy Eyewear for the year ended December 31. 2. Which statement shows the higher operating income? Why? 3. Carl's Crazy Eyewear's marketing vice president believes a new sales promotion that costs $360,000 would increase sales to 225,000 goggles. Should the company go ahead with the promotion? Give your reasoning. Print Done - X ember 31. (Round intermediary
The following data relates to Alpha Company. Units in beginning inventory Units produced Units sold ($350 per unit) Variable costs per unit: Direct materials Direct labor Variable overhead Fixed costs: Fixed overhead per unit produced Fixed selling and administrative expenses - 26,000 19,000 $40 60 25 $50 150,000 Determine the value of ending inventory under variable costing. a. $700,000 O b. $1,225,000 C. $805,000 O d. $875,000
Belle Company reports the following information for the current year. All beginning inventory amounts equaled $0 this year. Units produced this year 105,000 units Units sold this year 63,000 units Direct materials $ 29 per unit Direct labor $ 31 per unit Variable overhead $ 3 per unit Fixed overhead $ 918,750 in total Belle Company's product is sold for $89 per unit a Variable selling and administrative expense is $2 per unit and fixed selling and administrative is $370,000 per year. Compute the net income under variable costing.
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
The annual data that follows pertain to See It, a manufacturer of swimming goggles (the company had no beginning inventory): Sales price. . . . . . . . . . . . . . . . . . . . . . . . . $49 Variable manufacturing expense per unit. . $17 Sales commission expense per unit. . . . . . $9 Fixed manufacturing overhead. . . . . . . . . . $1,980,000 Fixed operating expenses. . . . . . . . . . . . . . $245,000 Number of goggles produced. . . . . . . . . . . 220,000 Number of goggles sold. . . . . . . . . . . . . . . 200,000 Requirements: 1. Prepare both conventional (absorption costing) and contribution margin (variable costing) income statements for See It for the year. 2. Which statement shows the higher operating income? Why? 3. The company marketing vice president believes a new sales promotion that costs $150,000 would increase sales to 220,000 goggles. Should the company…
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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Hagrid Gardening Corporation manufactures gardening products. The following information relates to the current period: DM Purchased $14,900 DM Inventory, Jan 1 $12,700 DM Inventory, Dec 31 $16,100 DL $6,400 MOH $16,700 Period Costs $10,500 WIP Inventory, Jan 1 $2,500 WIP Inventory, Dec 31 $8,000 FG Inventory, Jan 1 $19,500 FG Inventory, Dec 31 $4,800 A total of 5,000 products were sold for $25 each. Based on this information, please calculate the following: Cost of Goods Sold?
The following is the year ended data for Tiger Company: Sales Revenue $58,000 Cost of Goods Manufactured 21,000 Beginning Finished Goods Inventory 1,100 Ending Finished Goods Inventory 2,200 Selling Expenses 15,000 Administrative Expenses 3,900 What is the gross profit? A. $22,100 B. $38,100 C. $19,200 D.
The following information was taken from H Company's accounting records for the year December 31, 2008: Increase in raw materials inventory P 15,000 Decrease in finished goods inventory 35.000 Raw materials purchased O 430.000 Direct labor cost 200.000 Factory overhead control 260.000 Freight-in 45.000 There was no work in process inventory at the beginning or end of the year. H's 2008 cost of goods sold is if FOH is applied at 140% of labor costs:
SuperStar company operates 50 weeks per year, and its cost of goods sold last year was $2,000,000. The firm carries four items in inventory: two raw materials, two work-in-process items. The following table shows last year's average inventory levels for these items, along with their unit values. Part Number RM₁ RM₂ WIP₁ WIP₂ 7.175 4.175 6.175 Average 5.175 Inventory (units) Value ($/unit) 15,000 10,000 5,000 6,000 How many weeks of supply does the firm have? 3.00 5.00 8.00 12.00