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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$240 Assume that a company produced 10,000 units and sold 8,000 units during its first year of operations. It has also provided the following information: Particulars Selling price Per unit per year Direct materials $85 Direct labor $57 Variable manufacturing overhead $10 Sales commission $11 Fixed manufacturing overhead P Fixed selling and administrative expense $250,000 If the company's unit product cost under absorption costing is $197, then what is the amount of fixed manufacturing overhead per year?

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

Expert Solution & Answer

Answer 13

Expert Solution & Answer

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