Kau Corp. reported the following information for the most recent years ended:Year 1Year 2Production units150,000 125,000Sales price per unit$55.00$55.00Units sold125,000 130,000Direct Materials per unit$25.00$25.00Direct Labor per unitVariable Manufacturing OH per unit$12.00$12.00$5.00$5.00Fixed Manufacturing OH costs$450,000 $450,000Variable selling costs per unit$4.00$4.00Fixed selling costs$50,000 $50,000There was no beginning inventory in Year 1a. Prepare Income Statements for each year (Year 1 and Year 2) based on Full Costing

Name: Kau Corp. reported the following information for the most recent year
Uploaded: 2024-03-20T06:33:06.000Z
Channel: Bartleby
Description: Kau Corp. reported the following information for the most recent years ended:Year 1Year 2Production units150,000 125,000Sales price per unit$55.00$55.00Units sold125,000 130,000Direct Materials per unit$25.00$25.00Direct Labor per unitVariable Manuf

The absorption costing is also known as full costing. Under this method, the cost of goods sold comprises of variable and fixed manufacturing cost. INCOME STATEMENT - Full costing Year 1 Year 2 Units sold 125,000 130,000 Sales 6,875,000 7,150,000 Less: COGS Beginning inventory 0 1,125,000 Add: Production 6,750,000 5,700,000 Less: ending inventory (1,125,000) (912,000) COGS 5,625,000 5,913,000 Gross profit 1,250,000 1,237,000 Less: selling expenses Variable (500,000) (520,000) Fixed (50,000) (50,000) Net operating income 700,000 667,000 Calculation : For year 1, Cost per unit = 25 + 12 + 5 + (450,000 / 150,000) = $45 per unit For year 2, cost per unit= 25 + 12 + 5 + (450,000 / 125,000) = $45.6 per unit

Business

Accounting

Year 1 Year 2 Production units 150,000 125,000 Sales price per unit $55.00 $55.00 Units sold 125,000 130,000 Direct Materials per unit $25.00 $25.00 Direct Labor per unit $12.00 $12.00 $5.00 $450,000 $450,000 Variable Manufacturing OH per unit $5.00 Fixed Manufacturing OH costs Variable selling costs per unit $4.00 $4.00 Fixed selling costs $50,000 $50,000 There was no beginning inventory in Year 1 a. Prepare Income Statements for each year (Year 1 and Year 2) based on Full Costing

Year 1 Year 2 Production units 150,000 125,000 Sales price per unit $55.00 $55.00 Units sold 125,000 130,000 Direct Materials per unit $25.00 $25.00 Direct Labor per unit $12.00 $12.00 $5.00 $450,000 $450,000 Variable Manufacturing OH per unit $5.00 Fixed Manufacturing OH costs Variable selling costs per unit $4.00 $4.00 Fixed selling costs $50,000 $50,000 There was no beginning inventory in Year 1 a. Prepare Income Statements for each year (Year 1 and Year 2) based on Full Costing

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Q.4 Standard cost systems provide companies with a number of advantages, argue the statement. Following are the details of Abbass Industries for the period ended June 30, 2020. Company establish standard on its normal capacity of 120,000 units/hours in a year: Direct Material 600,000 kgs at Rs. 9 per kg Direct Labor 4 hours per unit at Rs. 6 per hour Factory overhead: Fixed cost Rs. 240,000 per year or Rs. 20,000 per month. Variable Cost Rs. 4.50 per hour. During the one month of operation, company produced 11,000 units. Direct material used: 60,500 kgs at Rs. 9.10 per kg Direct labor used:…
6
< Prev A company uses the following standard costs to produce a single unit of output. Direct materials Direct Manufacturing pounds at $0.70 per pound- 0.4 hour at $8.00 per hour labor $ 5.60 $ 3.20 $ 1.96 overhead 53 0.4 hour at $4.90 per hour - During the latest month, the company purchased and used 77,000 pounds of direct materials ata price of $0.90 per pound to produce 10,000 units of output Direct le month totaled $29,100 based on 3,880 direct labor hours worked. Variable manufacturing overhead costs incurred totaled $15 600 and fixed manufacturing overhee $10,000. Based on this information, the direct materials price variace for the month was: Multiple Choice $2,000 favorable $15,400 unfavorable $5,600 unfavorable $6,400 unfavorable Ne $5,600 favorable 23 of 25
Question 5.1 Stark and Company would like to evaluate one of the product lines that they sell to the defense department. Every month the Stark and Company produce an identical number of units, although the sales in units differ from month to month. Selling price Units in beginning inventory $105 110 Units produced 6,400 Units sold 6,100 Units in ending inventory Variable costs per unit: 410 Direct materials $62 Direct labour $48 Variable manufacturing overhead Variable selling and administrative Fixed costs: $3 $7 Fixed manufacturing overhead Fixed selling and administrative $64,000 $35,600 Submission Instructions: 1. Under variable costing, identify the unit product cost for the month. 2. What is the unit product cost for the month under absorption costing? 3. Prepare an income statement for the month using the contribution format and the variable costing method. 4. Prepare an income statement for the month using the absorption costing method.
Exercises 4 Event Company produces a single product with the following characteristics: price per unit, $30.00; variable material cost per unit, $9.20; variable labor cost per unit, $4.40; variable overhead cost per unit, $2.20; and fixed overhead cost per unit, $3.00. Event Company's manufacturing fixed costs are $5 million, and selling, general, and administration fixed costs are $1.5 million. What dollar sales are required for Event Company to earn a target profit of $600,000? Exercises 5 The following information pertains to Torasic Company's budgeted income statement for the month of June: Sales (1,500 units at $300) $450,000 Variable cost 200,000 250,000 280,000 $(30,000) Contribution margin Fixed cost Net loss Required a) Determine the company's breakeven point in both units and dollars. b) The sales manager believes that a $25,000 increase in the monthly advertising expenses will result in a considerable increase in sales. How much of an increase in sales must result from…
Details Product J Product G Product P Total Direct $25 $20 $11 $12,38,000 Material Cost Direct Labor 4/3 1 88,000 Hours Machine 4/3 1 76,000 Hours Direct Labor $8 $12 $6 Cost No. of 3 7 20 30 production run No. of 3 20 32 Deliveries No. of 15 35 220 270 Receipts (2*7) No. of 15 10 25 50 production orders Production 30,000 20,000 8,000 and sales units Raw material 11 usage units The total overhead costs is $18,48,000. Set-up 1.623377%, Machines 41.125541%, Receiving 23.538961%, Packing 13.528139% and Engineering 20.183983% of total overhead costs. The company operates a just-in-time inventory policy, and receives each component once per production per run. In the past the company has allocated overheads to products on the basis of direct labor hours. However, the majority of overheads are more closely related to machine hours than direct labor hours. The company has recently redesigned its cost system by recovering overheads using two volume-related bases: machine hours and materials…
Production data for 1 sinatra Materials 2.4 kg and £3 per kg Direct labour 1.5 hours at £5 per hour Variable overhead rate £4 per direct labour hour Fixed overhead absorption rate £7 per direct labour hour Budgeted production 5,000 sinatras The marginal cost of a sinatra is A £7.50 B £14.70 C £20.70 D £31.20
Question 2 Belian Sdn Bhd developed the following standard unit costs at 100% of its normal production capacity, which is 50,000 units per year: RM Direct materials Direct labour Variable factory overhead Fixed factory overhead 3 15 The selling price of each unit of product is RM25. Variable commercial expenses are RM1 per unit sold, and fixed commercial expenses total RM180,000 for the period, During the year, 49.000 units were produced and 52.000 units were sold. There is no work in process, beginning or ending inventories, and finished goods inventory is maintained at standard cost which has not changed from the preceding year. For the aurrent year, there is a net unfavorable variable cost variance in the amount of RM2.000. Áll standard cost variances are charged to cost of goods sold at the end of the period. Required : a) Prepare a comprehensive income statement on the absorption costing basis. b) Prepare a comprehensive income statement on the direct costing basis co31
Units in beginning inventory 0 Units produced 18,000 Units sold 15,000 Units in ending inventory 3,000 Variable costs per unit: Direct materials $ 270 Direct labor $ 380 Variable manufacturing overhead $ 48 Variable selling and administrative $ 21 Fixed costs: Fixed manufacturing overhead $ 650,000 Fixed selling and administrative $ 480,000 1.Absorption costing unit product cost: 2.Variable costing unit product cost:
Question 2 Pisang Berhad produces 500,000 switches per year with the following costs: (For the production of 500,000 switches) RM Direct materials 1,000,000 Direct labour 750,000 Variable manufacturing expenses 300,000 450,000 Fixed manufacturing expenses Total cost 2,500,000 RM5/unit Cost/per unit RM2,500,000/500,000 units + A supplier has approached the company, and offered the switches at RM4 per unit. Should the company decided to purchase from the supplier, the company need to employ an incoming quality controller with a salary of RM70,000 per annum. Other than this, all the other fixed manufacturing expenses will remain unchanged. Required: a) Should Pisang Berhad continue with the production of switches internally, or to purchase the switches from the external supplier? Support your answer with appropriate calculations. b) Will your answer change if the facilities freed up by the company can be used to do alternative works that will contribute an annual profit of RM50,000? Why?…
Question list Quesuvi 12 O Question 13 O Question 14 O Question 15 O Question 16 O Question 17 K Shady Inc. manufactures outdoor umbrellas. The company has the capacity to produce 100,000 units per year, but it currently produces and sells 75,000 units per year. The following information relates to current production: Sale price per unit $45 Variable costs per unit: Manufacturing Marketing and administrative $27 $6 Total fixed costs: Manufacturing $79,000 $20,000 Marketing and administrative If a special sales order is accepted for 8,200 umbrellas at a price of $37 per unit, and fixed costs increase by $16,000, how would operating income be affected? (NOTE: Assume regular sales are not affected by the special order.) Increase by $16,800 O A. O B. Increase by $48,800 O C. Increase by $66,000 O D. Decrease by $16,800