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Business Accounting GEN COMBO FINANCIAL AND MANAGERIAL ACCOUNTING; CONNECT ACCESS CARD

Income Statement: It is also known as profit and loss statement. It refers to that financial statement that is made to show the net income or loss that a company or a business has made by the end of a particular period. Variable Costing: It refers to the method of product costing in which the price of the product is calculated considering only the variable or direct costs or the cost that happened to occurred due to the product only. It is also called as marginal costing as it takes marginal costs while calculating the product cost. 1. To prepare: Income statement of the company for the year using variable costing. Solution: Given, Variable cost per unit is $1,830. Variable selling cost per unit is $270. Variable administration cost is $23,800(working note) P Company Income Statement (Variable Costing) Particulars Amount ($) Amount($) Sales 646,000 Total Variable Cost ( 170 × $ 1 , 830 ) (311,100) Variable Selling Expenses ( 170 × $ 270 ) (45,900) Variable Administration Cost (23,800) (380,800) Contribution Margin 265,200 Fixed Selling Expenses ($135,000-$45,900) (89,100) Fixed Administration Expenses ($59,500-$23,800) (35,700) (124,800) Net Income 140,400 Table (1) The net income under variable costing is $140,400. Working Note: Calculation of number of units purchased or sold is, Number of Units Sold = Total Sales Selling Price Per Unit = $ 646 , 000 $ 3 , 800 = 170 Calculation of variable administration cost is, Variable Administartion Cost = ( Total Administration Cost × Percentage of Vriable Cost ) =$59,500 × 40% =$23,800 Thus, the income for the company under variable costing is $140,400 . 2. To calculate: The contribution per unit toward covering fixed expenses and earning income. Solution: Given, Contribution margin is $265,200 (calculated in part 1). Number of units sold is 170 (calculated in part 1). The formula to calculate contribution per unit is, Contribution Per Unit = Total Contribution Margin Number of Units Sold Substitute $265,200 for total contribution margin and 170 for number of units sold. Contribution Per Unit = $ 265 , 200 170 = $ 1 , 560 Thus, the contribution per unit is $1,560 .

Income Statement: It is also known as profit and loss statement. It refers to that financial statement that is made to show the net income or loss that a company or a business has made by the end of a particular period. Variable Costing: It refers to the method of product costing in which the price of the product is calculated considering only the variable or direct costs or the cost that happened to occurred due to the product only. It is also called as marginal costing as it takes marginal costs while calculating the product cost. 1. To prepare: Income statement of the company for the year using variable costing. Solution: Given, Variable cost per unit is $1,830. Variable selling cost per unit is $270. Variable administration cost is $23,800(working note) P Company Income Statement (Variable Costing) Particulars Amount ($) Amount($) Sales 646,000 Total Variable Cost ( 170 × $ 1 , 830 ) (311,100) Variable Selling Expenses ( 170 × $ 270 ) (45,900) Variable Administration Cost (23,800) (380,800) Contribution Margin 265,200 Fixed Selling Expenses ($135,000-$45,900) (89,100) Fixed Administration Expenses ($59,500-$23,800) (35,700) (124,800) Net Income 140,400 Table (1) The net income under variable costing is $140,400. Working Note: Calculation of number of units purchased or sold is, Number of Units Sold = Total Sales Selling Price Per Unit = $ 646 , 000 $ 3 , 800 = 170 Calculation of variable administration cost is, Variable Administartion Cost = ( Total Administration Cost × Percentage of Vriable Cost ) =$59,500 × 40% =$23,800 Thus, the income for the company under variable costing is $140,400 . 2. To calculate: The contribution per unit toward covering fixed expenses and earning income. Solution: Given, Contribution margin is $265,200 (calculated in part 1). Number of units sold is 170 (calculated in part 1). The formula to calculate contribution per unit is, Contribution Per Unit = Total Contribution Margin Number of Units Sold Substitute $265,200 for total contribution margin and 170 for number of units sold. Contribution Per Unit = $ 265 , 200 170 = $ 1 , 560 Thus, the contribution per unit is $1,560 .

GEN COMBO FINANCIAL AND MANAGERIAL ACCOUNTING; CONNECT ACCESS CARD

GEN COMBO FINANCIAL AND MANAGERIAL ACCOUNTING; CONNECT ACCESS CARD

7th Edition

ISBN: 9781260088687

Author: John J Wild

Publisher: McGraw-Hill Education

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Chapter 19, Problem 7E

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Chapter 19 Solutions

GEN COMBO FINANCIAL AND MANAGERIAL ACCOUNTING; CONNECT ACCESS CARD

Ch. 19 - Prob. 1MCQ Ch. 19 - Prob. 2MCQ Ch. 19 - Prob. 3MCQ Ch. 19 - Prob. 4MCQ Ch. 19 - Prob. 5MCQ Ch. 19 - Prob. 1DQ Ch. 19 - Prob. 2DQ Ch. 19 - Prob. 3DQ Ch. 19 - Prob. 4DQ Ch. 19 - Prob. 5DQ

Ch. 19 - Prob. 6DQ Ch. 19 - Prob. 7DQ Ch. 19 - Prob. 8DQ Ch. 19 - Prob. 9DQ Ch. 19 - Prob. 10DQ Ch. 19 - Prob. 11DQ Ch. 19 - Prob. 12DQ Ch. 19 - Prob. 13DQ Ch. 19 - Prob. 14DQ Ch. 19 - Prob. 1QS Ch. 19 - Prob. 2QS Ch. 19 - Prob. 3QS Ch. 19 - Prob. 4QS Ch. 19 - Prob. 5QS Ch. 19 - Prob. 6QS Ch. 19 - Prob. 7QS Ch. 19 - Prob. 8QS Ch. 19 - Prob. 9QS Ch. 19 - Prob. 10QS Ch. 19 - Prob. 11QS Ch. 19 - Prob. 12QS Ch. 19 - Prob. 13QS Ch. 19 - Prob. 14QS Ch. 19 - Prob. 15QS Ch. 19 - Prob. 16QS Ch. 19 - Prob. 17QS Ch. 19 - Prob. 18QS Ch. 19 - Prob. 19QS Ch. 19 - Prob. 20QS Ch. 19 - Prob. 1E Ch. 19 - Prob. 2E Ch. 19 - Prob. 3E Ch. 19 - Prob. 4E Ch. 19 - Prob. 5E Ch. 19 - Prob. 6E Ch. 19 - Prob. 7E Ch. 19 - Prob. 8E Ch. 19 - Prob. 9E Ch. 19 - Prob. 10E Ch. 19 - Prob. 11E Ch. 19 - Prob. 12E Ch. 19 - Prob. 13E Ch. 19 - Prob. 14E Ch. 19 - Prob. 15E Ch. 19 - Prob. 16E Ch. 19 - Prob. 1PSA Ch. 19 - Prob. 2PSA Ch. 19 - Prob. 3PSA Ch. 19 - Prob. 1PSB Ch. 19 - Prob. 2PSB Ch. 19 - Prob. 3PSB Ch. 19 - Prob. 19SP Ch. 19 - BTN 19-1 Apple’s ending inventory amounts (in $...Ch. 19 - Prob. 2BTN Ch. 19 - Prob. 3BTN Ch. 19 - Prob. 4BTN Ch. 19 - Prob. 5BTN Ch. 19 - Prob. 6BTN Ch. 19 - Prob. 7BTN Ch. 19 - Prob. 8BTN Ch. 19 - Prob. 9BTN

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