MANAGERIAL ACCOUNTING F/MGRS.
6th Edition
ISBN: 9781264100590
Author: Noreen
Publisher: RENT MCG
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Chapter 4A, Problem 4A.3E
Super-Variable Costing and Variable Costing Unit Product Costs and Income Statements LO4—2. LO4—6
Kelly Company manufactures and sells one product. The following information pertains to each of the company’s first two years of operations:
The company does not incur any variable
Required:
- Assume the company uses super-variable costing:
- Compute the unit product cost for Year 1 and Year 2.
- Prepare an income statement for Year 1 and Year 2.
- Assume the company uses a variable costing system that assigns $10 of direct labor cost to each unit produced:
- Compute the unit product cost for Year 1 and Year 2.
- Prepare an income statement for Year 1 and Year 2.
- Prepare a reconciliation that explains the difference between the super-variable costing and variable costing net operating incomes in Years 1 and 2.
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Q – 5:
Bettina Company incurs the following costs to produce and sell a single product.
Variable costs per unit:
Direct materials $15
Direct labor$7.5
Variable manufacturing overhead$3
Variable selling and administrative expenses$6
Fixed costs per year:
Fixed manufacturing overhead . . . . . . . . . . . . . . . . . $45,000
Fixed selling and administrative expenses . . . . . . . $150,000
During the last year, 15,000 units were produced and 12,500 units were sold. The Finished Goods inventory account at the end of the year shows a balance of $63,750 for the 2,500 unsold units.
Required:
1. Is the company using absorption costing or variable costing to cost units in the Finished Goods inventory account? Show computations to support your answer.
2. Assume that the company wishes to prepare financial statements for the year to issue to its stockholders.
a. Is the $63,750 figure for Finished Goods inventory the correct amount to use on these…
Problem 5 (Super-Variable Costing and Variable Costing Unit Product
Costs and Income Statements)
Lyns Company manufactures and sells one product. The following
information pertains to the company's first year of operations:
Variable cost per unit:
Direct materials
Fixed costs per year:
130
P7,500,000
P4,200,000
P1,100,000
Direct labor
Fixed manufacturing overhead
Fixed selling and administrative expenses
The company does not incur any variable manufacturing overhead costs or
variable selling and administrative expenses. During its first year of
operations, Lyns produced 60,000 units and sold 52,000 units. The selling
price of the company's product is P400 per unit.
Required:
1. Assume the company uses super-variable costing:
a. Compute the unit product cost for the year.
b. Prepare an income statement for the year.
2. Assume the company uses a variable costing system that assigns P125.00
of direct labor cost to each unit produced:
a. Compute the unit product cost for the year.
b.…
Help with 4A and 4B please
Chapter 4A Solutions
MANAGERIAL ACCOUNTING F/MGRS.
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