Managerial Accounting
15th Edition
ISBN: 9780078025631
Author: Ray H Garrison, Eric Noreen, Peter C. Brewer Professor
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 6, Problem 1AE
| A | B | C | D | E | |
| 1 | Chapter 6: Applying Excel | ||||
| 2 | |||||
| 3 | Data | ||||
| 4 | Selling price per unit | $50 | |||
| 5 | |||||
| 6 | Variable per unit produced | ||||
| 7 | Direct materials | $11 | |||
| 8 | Direct labour | ||||
| 9 | Variable manufacturing |
$6 | |||
| 10 | Fixed manufacturing overhead per year | $120,000 | |||
| 11 | Selling and administrative expenses | ||||
| 12 | Variable per unit sold | $4 | |||
| 13 | Fixed per year | $70 000 | |||
| 14 | |||||
| 15 | Year 1 | Year 2 | |||
| 16 | Units in beginning inventory | 0 | ? | ||
| 17 | Units produced doing the year | 10 000 | 6 000 | ||
| 18 | Units sold doing the year | 8 000 | 8 000 | ||
| 19 | |||||
| 20 | Enter a formula into each of the cells marked with a ? below |
||||
| 21 | Review Problem 1: Contrasting Variable and Absorption Costing | ||||
| 22 | |||||
| 23 | Compute the Ending Inventory | ||||
| 24 | Year 1 | Year 2 | |||
| 25 | Units in beginning inventory | 0 | ? | ||
| 26 | Units produced doing the year | ? | ? | ||
| 27 | Units sold doing the year | ? | ? | ||
| 28 | Units in ending inventory | ? | ? | ||
| 29 | |||||
| 30 | Compute the Absorption Costing Unit Product Cost | ||||
| 31 | Year 1 | Year 2 | |||
| 32 | Direct materials | ? | ? | ||
| 33 | Direct labour | ? | ? | ||
| 34 | Variable manufacturing overhead | ? | ? | ||
| 35 | Fixed manufacturing overhead | ? | ? | ||
| 36 | Absorption costing unit product cost | ? | ? | ||
| 37 | |||||
| 38 | Construct the Absorption Costing Income Statement | ||||
| 39 | Year 1 | Year 2 | |||
| 40 | Sales | ? | ? | ||
| 41 | Cost of goods sold | ? | ? | ||
| 42 | Gross margin | ? | ? | ||
| 43 | Selling and administrative expenses | ? | ? | ||
| 44 | Net operating income | ? | ? | ||
| 45 | |||||
| 46 | Compute the Variable Costing Unit Product Cost | ||||
| 47 | Year 1 | Year 2 | |||
| 48 | Direct materials | ? | ? | ||
| 49 | Direct labour | ? | ? | ||
| 50 | Variable manufacturing overhead | ? | ? | ||
| 51 | Variable costing unit product cost | ? | ? | ||
| 52 | |||||
| 53 | Construct the Variable Costing Income Statement | ||||
| 54 | Year 1 | Year 2 | |||
| 55 | Sales | ? | ? | ||
| 56 | Variable expenses | ||||
| 57 | Variable cost of goods sold | ? | ? | ||
| 58 | Variable selling and administrative expenses | ? | ? | ? | ? |
| 59 | Contribution margin | ? | ? | ||
| 60 | Fixed expenses | ||||
| 61 | Fixed manufacturing overhead | ? | ? | ||
| 62 | Fixed selling and administrative expenses | ? | ? | ? | ? |
| 63 | Net operating income | ? | ? | ||
You should proceed to the requirements below only after completing your worksheet. The LIFO inventory flow assumption is used throughout this problem.
Required:
1. Check your worksheet by changing the units sold in the Data to 6,000 for Year 2. The cost of goods sold under absorption costing for Year 2 should now be $24-0.000. If it isn't check cell C41. The formula in this cell should be =IF(C26
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A
1 Original Data:
2
3
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5
6
7
8
9
10
11
12 Part 1
13
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15
16
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B
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18 Sales
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$30.00
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2. Change all of the numbers in the data area of your worksheet so that it looks like this:
A
1 Chapter 8: Applying Excel
2
3
Data
4 Selling price per unit
5
Manufacturing costs:
6
Variable per unit produced:
7
8
9
10
Direct materials
Direct labor
Variable manufacturing overhead
Fixed manufacturing overhead per year
11 Selling and administrative expenses:
12
Variable per unit sold
Fixed per year
13
14
15
16
17
18
Units in beginning inventory
Units produced during the year
Units sold during the year
Net operating income
$
$
$
$
$
B
Yes
O No
399
142
74
39
170,000
Year 1
Net operating income
3
$ 98,000
O Yes
No
0
3,400
2,900
If your formulas are correct, you should get the correct answers to the following questions.
(a) What is the net operating income (loss) in Year 1 under absorption costing?
✔Units were left over from the previous year.
C
Year 2
2,500
2,900
3.
Make a note of the absorption costing net operating income (loss) in Year 2.
(b) What is the net operating income (loss) in…
Chapter 6 Solutions
Managerial Accounting
Ch. 6.A - Prob. 1ECh. 6.A - EXERCISE 6A-2 Super-Variable Costing and Variable...Ch. 6.A - Prob. 3ECh. 6.A - PROBLEM 6A-4 Super-Variable Costing and Variable...Ch. 6.A - Prob. 5PCh. 6 - Prob. 1QCh. 6 - Are selling and administrative expenses treated as...Ch. 6 - Explain how fixed manufacturing overhead costs are...Ch. 6 - What are the arguments in favor of treating fixed...Ch. 6 - What are the arguments in favor of treating fixed...
Ch. 6 - Prob. 6QCh. 6 - Prob. 7QCh. 6 - Prob. 8QCh. 6 - Under absorption costing, how is it possible to...Ch. 6 - Prob. 10QCh. 6 - Prob. 11QCh. 6 - What costs are assigned to a segment under the...Ch. 6 - Distinguish between a trace able fixed cost and a...Ch. 6 - Explain how the contribution margin differs from...Ch. 6 - Prob. 15QCh. 6 - Prob. 16QCh. 6 - Should a company allocate its common feed costs to...Ch. 6 - A B C D E 1 Chapter 6: Applying Excel 2 3 Data 4...Ch. 6 - A B C D E 1 Chapter 6: Applying Excel 2 3 Data 4...Ch. 6 - A B C D E
1 Chapter 6: Applying...Ch. 6 - Diego Company manufactures one product that is...Ch. 6 - Prob. 2F15Ch. 6 - Prob. 3F15Ch. 6 - Prob. 4F15Ch. 6 - Prob. 5F15Ch. 6 - Diego Company manufactures one product that is...Ch. 6 - Prob. 7F15Ch. 6 - Prob. 8F15Ch. 6 - Prob. 9F15Ch. 6 - Prob. 10F15Ch. 6 - Prob. 11F15Ch. 6 - Prob. 12F15Ch. 6 - Prob. 13F15Ch. 6 - Diego Company manufactures one product that is...Ch. 6 - Prob. 15F15Ch. 6 - Prob. 1ECh. 6 - Prob. 2ECh. 6 - Prob. 3ECh. 6 - Prob. 4ECh. 6 - Prob. 5ECh. 6 - EXERCISE 6-6 Variable and Absorption Costing Unit...Ch. 6 - Prob. 7ECh. 6 - Prob. 8ECh. 6 - EXERCISE 6-9 Variable and Absorption Costing Unit...Ch. 6 - Prob. 10ECh. 6 - Prob. 11ECh. 6 - Prob. 12ECh. 6 - Prob. 13ECh. 6 - Prob. 14ECh. 6 - EXERCISE 6—15 Absorption Costing Unit Product Cost...Ch. 6 - EXERCISE 6-16 Working with a Segmented Income...Ch. 6 - Prob. 17ECh. 6 - Prob. 18PCh. 6 - Prob. 19PCh. 6 - Prob. 20PCh. 6 - PROBLEM 6—21 Segment Reporting and Decision-Making...Ch. 6 - Prob. 22PCh. 6 - Prob. 23PCh. 6 - PROBLEM 6-24 Companywide and Segment Break-Even...Ch. 6 - Prob. 25PCh. 6 - Prob. 26PCh. 6 - PROBLEM 6-27 Incentives Created by Absorption...Ch. 6 - Prob. 28PCh. 6 - Prob. 29CCh. 6 - Prob. 30C
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- 2. Change all of the numbers in the data area of your worksheet so that it looks like this: A 1 Chapter 6: Applying Excel 2 ook 3 Data rint 456 Selling price per unit Manufacturing costs: Variable per unit produced: B C $ 296 7 Direct materials $ 104 rences 8 9 10 11 B12345 Direct labor $ 76 Variable manufacturing overhead $ 26 Fixed manufacturing overhead per year $ 184,800 Selling and administrative expenses: Variable per unit sold $ 9 Fixed per year $ 77,000 Units in beginning inventory 16 Units produced during the year 17 Units sold during the year 18 Year 1 Year 2 0 3,300 2,800 3,000 3,000 If your formulas are correct, you should get the correct answers to the following questions. (a) What is the net operating income (loss) in Year 1 under absorption costing? Net operating lossarrow_forwardAverage Cost per Unit $ 7.00 $ 4.00 $ 1.50 $ 5.00 $ 3.50 $ 2.50 $ 1.00 $ 0.50 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense Required: 1. For financial accounting purposes, what is the total amount of product costs incurred to make 20,000 units? 2. For financial accounting purposes, what is the total amount of perlod costs incurred to sell 20,000 units? 3. For financial accounting purposes, what is the total amount of product costs incurred to make 22,000 units? 4. For financial accounting purposes, what is the total amount of period costs incurred to sell 18,000 units? 1. Total amount of product costs 2. Total amount of period costs incurred 3. Total amount of product costs 4. Total amount of period costsarrow_forwardA-6arrow_forward
- t 0 ences Mc Graw Hill Required information [The following information applies to the questions displayed below.] Diego Company manufactures one product that is sold for $75 per unit in two geographic regions-the East and West regions. The following information pertains to the company's first year of operations in which it produced 46,000 units and sold 42,000 units. Variable costs per unit: Manufacturing: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expense Break even point $ 25 $ 20 The company sold 31,000 units in the East region and 11,000 units in the West region. It determined that $200,000 of its fixed selling and administrative expense is traceable to the West region, $150,000 is traceable to the East region, and the remaining $38,000 is a common fixed expense. The company will continue to incur the total amount of its fixed manufacturing…arrow_forwardVAR COST Student Name => ______________________ Section Number => ______________________ - - - - - - - - 6 Data Section: 7 8 Actual production in units 100,000 9 Sales in units 80,000 10 Sales price per unit $30 11 Variable manufacturing costs per unit $14 12 Variable selling costs per unit $2 13 Fixed manufacturing costs $630,000 14 Fixed selling expenses $100,000 28 15 - - - 16 Answer Section: 17 Income statement: Absorption costing 18 19 Sales FORMULA1 20 Cost of goods sold: 21 Variable manufacturing costs FORMULA2 22 Fixed manufacturing costs FORMULA3 23 ---------- 24 Total goods available for sale $0 25 Less ending inventory FORMULA4 26 ---------- 27 Cost of goods sold $0 28 ---------- 29 Gross profit $0 30 Fixed selling expenses FORMULA5 31…arrow_forward11arrow_forward
- Product Information A B $335.00 5820 52% Unit Sales Price $470.00 3841e 48% Units Manufactured and Solde Sales Mix (% of total units sold)a Vary with Unit Costs A Be $264.534e $58.804e $19.51e $342.84e Direct Material $162.614 Direct Labore $44.804 $15.43 $377.364 Other Vary-with-Unit Costse Total Vary with Unit Costse Fixed Costs $183,868.20 Vary-with-Revenue Costs Sales Commissionse 3.5% calculate the break even point in dollars for each producte calculate the Break-Even Variable Costs for the two products.e calculate the Break-Even Contribution Margin (this is the contribution margin for the total number of units reauired to break even.)' calculate the Break-Even Profit Before Tax. (Break even profit would normally be 0, but because we rounded up our break-even units, this should be slightly more than 0.)earrow_forwardH1.arrow_forwardQuestion 19?arrow_forward
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