1.
The operating income in both the year 2012 and 2013.
Given information:
For the year 2012,
The number of T-shirts sold is 205,000.
The average selling price is $32 per T-shirt.
The number of T-shirts purchased is 225,500.
The average cost per T-shirt is $17.
The administrative cost is $1,739,000.
For the year 2013,
The number of T-shirts sold is 233,000.
The average selling price is $33 per T-shirt.
The number of T-shirts purchased is 257,000.
The average cost per T-shirt is $15.
The administrative cost is $1,691,000.
2.
The growth, price recovery and productivity components that explain the change in operating income.
Given information:
The actual units of T-shirts sold in 2013 are 233,000.
The actual units of T-shirts sold in 2012 are 205,000.
The selling price in 2012 is $32.
The actual units of T-shirts used to produce output in 2012 are 225,500.
The cost of the T-shirt in 2012 is $17.
The administrative capacity is 4,700 customers.
The administrative costs are $1,739,000.
3.
To explain: The answers in requirement 2 and the indication of each component.
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Chapter 12 Solutions
Cost Accounting, Student Value Edition Plus MyAccountingLab with Pearson eText -- Access Card Package (15th Edition)
- 1.1.3 accounting .arrow_forwardAssume the following informationarrow_forwardThe addition of the cost of goods sold (COGS) and gross profit is the main way that a merchandising company's income statement differs from that of a service organization. Since a merchandising business makes their money by selling material goods, sales revenue, COGS, and gross profit before operating expenditures are subtracted which are all included in its income statement. A service company, on the other hand, does not have a COGS section because they have no inventory involved but instead generates their income through the delivery of services (Weygandt, Kimmel, & Kieso, 2022). The income statement of a merchandising company will usually have only a single-step or could have a multi-step style, with the multi-step clearly separating the net income from the operational income and gross profit. This difference is important because COGS is a major part of financial reporting for merchandising organizations, because it has a direct impact on profitability and financial analysis…arrow_forward
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