Throughput Costing: A costing approach that considers only direct material as the cost attributable to inventory is called throughput costing. It is based on the concept that only the raw materials used for production are variable costs and all other costs must be recorded as period costs. To prepare: The income statement of Company C for January, February and March 2014 under throughput costing.

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Answer 1

Question

Chapter 9, Problem 9.19E

1.

To determine

Throughput Costing:

A costing approach that considers only direct material as the cost attributable to inventory is called throughput costing. It is based on the concept that only the raw materials used for production are variable costs and all other costs must be recorded as period costs.

To prepare: The income statement of Company C for January, February and March 2014 under throughput costing.

2.

To determine

To explain: The difference in the operating income as per throughput costing and as per variable and absorption costing.

3.

To determine

To identify: One benefit for Company C to use throughput costing.

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1. Stampede Company has two service departments — purchasing and maintenance, and two production departments — fabrication and assembly. The distribution of each service department's efforts to the other departments is shown below: FROM TO Purchasing Maintenance Fabrication Assembly Purchasing 0% 45% 45% 10% Maintenance 55% 0% 30% 15% The direct operating costs of the departments (including both variable and fixed costs) were as follows: Purchasing $ 138,000 Maintenance 60,000 Fabrication 114,000 Assembly 90,000 The total cost accumulated in the fabrication department using the direct method is: 2. Bifurcator Company produces three products — X, Y, and Z — from a joint process. Each product may be sold at the split-off point or processed further. Additional processing requires no special facilities, and production costs of further processing are entirely variable and traceable to the products involved. Last year all three products were processed beyond…

Answer 2

Question

Chapter 9, Problem 9.19E

1.

To determine

Throughput Costing:

A costing approach that considers only direct material as the cost attributable to inventory is called throughput costing. It is based on the concept that only the raw materials used for production are variable costs and all other costs must be recorded as period costs.

To prepare: The income statement of Company C for January, February and March 2014 under throughput costing.

2.

To determine

To explain: The difference in the operating income as per throughput costing and as per variable and absorption costing.

3.

To determine

To identify: One benefit for Company C to use throughput costing.

Expert Solution & Answer

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Answer 3

Question

Chapter 9, Problem 9.19E

1.

To determine

Throughput Costing:

A costing approach that considers only direct material as the cost attributable to inventory is called throughput costing. It is based on the concept that only the raw materials used for production are variable costs and all other costs must be recorded as period costs.

To prepare: The income statement of Company C for January, February and March 2014 under throughput costing.

2.

To determine

To explain: The difference in the operating income as per throughput costing and as per variable and absorption costing.

3.

To determine

To identify: One benefit for Company C to use throughput costing.

Expert Solution & Answer

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Answer 4

Question

Chapter 9, Problem 9.19E

1.

To determine

Throughput Costing:

A costing approach that considers only direct material as the cost attributable to inventory is called throughput costing. It is based on the concept that only the raw materials used for production are variable costs and all other costs must be recorded as period costs.

To prepare: The income statement of Company C for January, February and March 2014 under throughput costing.

2.

To determine

To explain: The difference in the operating income as per throughput costing and as per variable and absorption costing.

3.

To determine

To identify: One benefit for Company C to use throughput costing.

Expert Solution & Answer

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Answer 5

Chapter 9, Problem 9.19E

1.

To determine

Throughput Costing:

A costing approach that considers only direct material as the cost attributable to inventory is called throughput costing. It is based on the concept that only the raw materials used for production are variable costs and all other costs must be recorded as period costs.

To prepare: The income statement of Company C for January, February and March 2014 under throughput costing.

2.

To determine

To explain: The difference in the operating income as per throughput costing and as per variable and absorption costing.

3.

To determine

To identify: One benefit for Company C to use throughput costing.

Answer 6

Chapter 9, Problem 9.19E

1.

To determine

Throughput Costing:

A costing approach that considers only direct material as the cost attributable to inventory is called throughput costing. It is based on the concept that only the raw materials used for production are variable costs and all other costs must be recorded as period costs.

To prepare: The income statement of Company C for January, February and March 2014 under throughput costing.

Answer 7

Chapter 9, Problem 9.19E

1.

To determine

Throughput Costing:

A costing approach that considers only direct material as the cost attributable to inventory is called throughput costing. It is based on the concept that only the raw materials used for production are variable costs and all other costs must be recorded as period costs.

To prepare: The income statement of Company C for January, February and March 2014 under throughput costing.

Answer 8

2.

To determine

To explain: The difference in the operating income as per throughput costing and as per variable and absorption costing.

Answer 9

2.

To determine

To explain: The difference in the operating income as per throughput costing and as per variable and absorption costing.

Answer 10

3.

To determine

To identify: One benefit for Company C to use throughput costing.

Answer 11

3.

To determine

To identify: One benefit for Company C to use throughput costing.

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 9 - Differences in operating income between variable...Ch. 9 - Why is the term direct costing a misnomer?Ch. 9 - Do companies in either the service sector or the...Ch. 9 - Explain the main conceptual issue under variable...Ch. 9 - Companies that make no variable-cost/fixed-cost...Ch. 9 - The main trouble with variable costing is that it...Ch. 9 - Give an example of how, under absorption costing,...Ch. 9 - What are the factors that affect the breakeven...Ch. 9 - Critics of absorption costing have increasingly...Ch. 9 - What are two ways of reducing the negative aspects...

To explain: The difference in the operating income as per throughput costing and as per variable and absorption costing.

To identify: One benefit for Company C to use throughput costing.

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Chapter 9 Solutions