Variable costing: Variable costing is one of the methods of calculation of product costs. Under this method, only the variable manufacturing costs are considered as part of the product cost. Under this method, the income statement calculates contribution margin and net operating income. Absorption costing: Absorption costing is one of the methods of calculation of product costs. Under this method, the fixed manufacturing overheads are also considered as part of the product cost with direct costs. The unit product cost includes direct material, direct labor, and variable overhead and allocated amount of fixed overhead. Under this method, the income statement calculates Gross margin and net operating income. Requirement-1: To Calculate: The Product cost per meal under Absorption costing and Variable costing methods

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Answer 1

Question

Chapter 21, Problem P21.61BPGB

To determine

Concept Introduction:

Variable costing: Variable costing is one of the methods of calculation of product costs. Under this method, only the variable manufacturing costs are considered as part of the product cost. Under this method, the income statement calculates contribution margin and net operating income.

Absorption costing: Absorption costing is one of the methods of calculation of product costs. Under this method, the fixed manufacturing overheads are also considered as part of the product cost with direct costs. The unit product cost includes direct material, direct labor, and variable overhead and allocated amount of fixed overhead. Under this method, the income statement calculates Gross margin and net operating income.

Requirement-1:

To Calculate: The Product cost per meal under Absorption costing and Variable costing methods

To determine

Requirement-2:

To Prepare: The Income Statements for January under Absorption costing and Variable costing methods

To determine

Requirement-3:

To identify: The method with the higher operating income

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ABC Company sold a machine for $8,500 that originally cost $16,000. The balance of the Accumulated Depreciation account related to this equipment was $10,300. The entry to record the gain or loss on the disposal of this machine would include: right Answer

Answer 2

Question

Chapter 21, Problem P21.61BPGB

To determine

Concept Introduction:

Variable costing: Variable costing is one of the methods of calculation of product costs. Under this method, only the variable manufacturing costs are considered as part of the product cost. Under this method, the income statement calculates contribution margin and net operating income.

Absorption costing: Absorption costing is one of the methods of calculation of product costs. Under this method, the fixed manufacturing overheads are also considered as part of the product cost with direct costs. The unit product cost includes direct material, direct labor, and variable overhead and allocated amount of fixed overhead. Under this method, the income statement calculates Gross margin and net operating income.

Requirement-1:

To Calculate: The Product cost per meal under Absorption costing and Variable costing methods

To determine

Requirement-2:

To Prepare: The Income Statements for January under Absorption costing and Variable costing methods

To determine

Requirement-3:

To identify: The method with the higher operating income

Expert Solution & Answer

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Answer 3

Question

Chapter 21, Problem P21.61BPGB

To determine

Concept Introduction:

Variable costing: Variable costing is one of the methods of calculation of product costs. Under this method, only the variable manufacturing costs are considered as part of the product cost. Under this method, the income statement calculates contribution margin and net operating income.

Absorption costing: Absorption costing is one of the methods of calculation of product costs. Under this method, the fixed manufacturing overheads are also considered as part of the product cost with direct costs. The unit product cost includes direct material, direct labor, and variable overhead and allocated amount of fixed overhead. Under this method, the income statement calculates Gross margin and net operating income.

Requirement-1:

To Calculate: The Product cost per meal under Absorption costing and Variable costing methods

To determine

Requirement-2:

To Prepare: The Income Statements for January under Absorption costing and Variable costing methods

To determine

Requirement-3:

To identify: The method with the higher operating income

Expert Solution & Answer

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Answer 4

Question

Chapter 21, Problem P21.61BPGB

To determine

Concept Introduction:

Variable costing: Variable costing is one of the methods of calculation of product costs. Under this method, only the variable manufacturing costs are considered as part of the product cost. Under this method, the income statement calculates contribution margin and net operating income.

Absorption costing: Absorption costing is one of the methods of calculation of product costs. Under this method, the fixed manufacturing overheads are also considered as part of the product cost with direct costs. The unit product cost includes direct material, direct labor, and variable overhead and allocated amount of fixed overhead. Under this method, the income statement calculates Gross margin and net operating income.

Requirement-1:

To Calculate: The Product cost per meal under Absorption costing and Variable costing methods

To determine

Requirement-2:

To Prepare: The Income Statements for January under Absorption costing and Variable costing methods

To determine

Requirement-3:

To identify: The method with the higher operating income

Expert Solution & Answer

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Answer 5

Chapter 21, Problem P21.61BPGB

To determine

Concept Introduction:

Variable costing: Variable costing is one of the methods of calculation of product costs. Under this method, only the variable manufacturing costs are considered as part of the product cost. Under this method, the income statement calculates contribution margin and net operating income.

Absorption costing: Absorption costing is one of the methods of calculation of product costs. Under this method, the fixed manufacturing overheads are also considered as part of the product cost with direct costs. The unit product cost includes direct material, direct labor, and variable overhead and allocated amount of fixed overhead. Under this method, the income statement calculates Gross margin and net operating income.

Requirement-1:

To Calculate: The Product cost per meal under Absorption costing and Variable costing methods

To determine

Requirement-2:

To Prepare: The Income Statements for January under Absorption costing and Variable costing methods

To determine

Requirement-3:

To identify: The method with the higher operating income

Answer 6

Chapter 21, Problem P21.61BPGB

To determine

Concept Introduction:

Variable costing: Variable costing is one of the methods of calculation of product costs. Under this method, only the variable manufacturing costs are considered as part of the product cost. Under this method, the income statement calculates contribution margin and net operating income.

Absorption costing: Absorption costing is one of the methods of calculation of product costs. Under this method, the fixed manufacturing overheads are also considered as part of the product cost with direct costs. The unit product cost includes direct material, direct labor, and variable overhead and allocated amount of fixed overhead. Under this method, the income statement calculates Gross margin and net operating income.

Requirement-1:

To Calculate: The Product cost per meal under Absorption costing and Variable costing methods

Answer 7

Chapter 21, Problem P21.61BPGB

To determine

Concept Introduction:

Variable costing: Variable costing is one of the methods of calculation of product costs. Under this method, only the variable manufacturing costs are considered as part of the product cost. Under this method, the income statement calculates contribution margin and net operating income.

Absorption costing: Absorption costing is one of the methods of calculation of product costs. Under this method, the fixed manufacturing overheads are also considered as part of the product cost with direct costs. The unit product cost includes direct material, direct labor, and variable overhead and allocated amount of fixed overhead. Under this method, the income statement calculates Gross margin and net operating income.

Requirement-1:

To Calculate: The Product cost per meal under Absorption costing and Variable costing methods

Answer 8

To determine

Requirement-2:

To Prepare: The Income Statements for January under Absorption costing and Variable costing methods

Answer 9

To determine

Requirement-2:

To Prepare: The Income Statements for January under Absorption costing and Variable costing methods

Answer 10

To determine

Requirement-3:

To identify: The method with the higher operating income

Answer 11

To determine

Requirement-3:

To identify: The method with the higher operating income

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 21 - For Frank’s Funky Sounds, straight-line...Ch. 21 - Prob. 2QC Ch. 21 - Prob. 3QC Ch. 21 - Prob. 4QC Ch. 21 - Prob. 5QC Ch. 21 - On a CVP graph, the total cost line intersects the...Ch. 21 - If a company increases its sales price per unit...Ch. 21 - Prob. 8QC Ch. 21 - Prob. 9QC Ch. 21 - Prob. 10QC

Requirement-2: To Prepare: The Income Statements for January under Absorption costing and Variable costing methods

Requirement-3: To identify: The method with the higher operating income

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Chapter 21 Solutions

Requirement-2:

To Prepare: The Income Statements for January under Absorption costing and Variable costing methods

Requirement-3:

To identify: The method with the higher operating income