Variable Costing Managers frequently use variable costing for internal purposes for taking decision making. The cost of goods manufactured includes direct materials, direct labor, and variable factory overhead . Fixed factory overhead considered as period (fixed) expense. To Determine: The manufacturing margin for the month of January of Company L.

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Answer 1

Question

Chapter 20, Problem 20.1APE

(a)

To determine

Variable Costing

Managers frequently use variable costing for internal purposes for taking decision making. The cost of goods manufactured includes direct materials, direct labor, and variable factory overhead. Fixed factory overhead considered as period (fixed) expense.

To Determine: The manufacturing margin for the month of January of Company L.

(b)

To determine

The contribution margin for the month of January of Company L.

(c)

To determine

The Income from operations for the month of January for Company L.

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John was a civil servant with the Trinidad & Tobago (T&T) Government for over 30 years and retired 5 years ago. He is in receipt of a monthly pension. John also received a lump sum on retirement and invested part of this in a small retail business in downtown San Fernando. He retails designer clothing and perfumes and manages to make a modest profit, after deduction of business expenses. John invested the remainder of his pension lump sum in the Unit Trust Corporation of Trinidad and Tobago and is in receipt of monthly dividends. John receives a monthly pension of $6,000. The retail business has a financial year- end of 31 December and in the fiscal year 2011 he made a taxable profit of $100,000. In the fiscal year 2011 in T&T there is a personal allowance of $60,000 and the rate of Income tax is 25%. John no longer qualifies for any of the other deductions available to individuals and receives his pension after deduction of tax under the P.A.Y.E. system. In 2011, John…

Answer 2

Question

Chapter 20, Problem 20.1APE

(a)

To determine

Variable Costing

Managers frequently use variable costing for internal purposes for taking decision making. The cost of goods manufactured includes direct materials, direct labor, and variable factory overhead. Fixed factory overhead considered as period (fixed) expense.

To Determine: The manufacturing margin for the month of January of Company L.

(b)

To determine

The contribution margin for the month of January of Company L.

(c)

To determine

The Income from operations for the month of January for Company L.

Expert Solution & Answer

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Answer 3

Question

Chapter 20, Problem 20.1APE

(a)

To determine

Variable Costing

Managers frequently use variable costing for internal purposes for taking decision making. The cost of goods manufactured includes direct materials, direct labor, and variable factory overhead. Fixed factory overhead considered as period (fixed) expense.

To Determine: The manufacturing margin for the month of January of Company L.

(b)

To determine

The contribution margin for the month of January of Company L.

(c)

To determine

The Income from operations for the month of January for Company L.

Expert Solution & Answer

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Answer 4

Question

Chapter 20, Problem 20.1APE

(a)

To determine

Variable Costing

Managers frequently use variable costing for internal purposes for taking decision making. The cost of goods manufactured includes direct materials, direct labor, and variable factory overhead. Fixed factory overhead considered as period (fixed) expense.

To Determine: The manufacturing margin for the month of January of Company L.

(b)

To determine

The contribution margin for the month of January of Company L.

(c)

To determine

The Income from operations for the month of January for Company L.

Expert Solution & Answer

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Answer 5

Chapter 20, Problem 20.1APE

(a)

To determine

Variable Costing

Managers frequently use variable costing for internal purposes for taking decision making. The cost of goods manufactured includes direct materials, direct labor, and variable factory overhead. Fixed factory overhead considered as period (fixed) expense.

To Determine: The manufacturing margin for the month of January of Company L.

(b)

To determine

The contribution margin for the month of January of Company L.

(c)

To determine

The Income from operations for the month of January for Company L.

Answer 6

Chapter 20, Problem 20.1APE

(a)

To determine

Variable Costing

Managers frequently use variable costing for internal purposes for taking decision making. The cost of goods manufactured includes direct materials, direct labor, and variable factory overhead. Fixed factory overhead considered as period (fixed) expense.

To Determine: The manufacturing margin for the month of January of Company L.

Answer 7

Chapter 20, Problem 20.1APE

(a)

To determine

Variable Costing

Managers frequently use variable costing for internal purposes for taking decision making. The cost of goods manufactured includes direct materials, direct labor, and variable factory overhead. Fixed factory overhead considered as period (fixed) expense.

To Determine: The manufacturing margin for the month of January of Company L.

Answer 8

(b)

To determine

The contribution margin for the month of January of Company L.

Answer 9

(b)

To determine

The contribution margin for the month of January of Company L.

Answer 10

(c)

To determine

The Income from operations for the month of January for Company L.

Answer 11

(c)

To determine

The Income from operations for the month of January for Company L.

Answer 12

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Answer 13

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Answer 14

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Answer 15

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The contribution margin for the month of January of Company L.

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