COST ACCOUNTING
16th Edition
ISBN: 9781323169261
Author: Horngren
Publisher: PEARSON C
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Chapter 9, Problem 9.23E
Variable and absorption costing, explaining operating-income differences. EntertainMe Corporation manufactures and sells 50-inch television sets and uses
The selling price per unit is $3,300. The budgeted level of production used to calculate the budgeted fixed
- 1. Prepare income statements for EntertainMe in January, February, and March 2017 under (a) variable costing and (b) absorption costing.
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The selling price per unit is $3,300. The budgeted level of production used to calculate the budgeted fixed manufacturing cost per unit is 1,500 units. There are no price, efficiency, or spending variances. Any production-volume variance is written off to cost of goods sold in the month in which it occurs.
Q. Prepare income statements for EntertainMe in January, February, and March 2017 under (a) variable costing and (b) absorption costing.
The Alamo Company reports the actual data for 2023 and 2022. There are no price, efficiency
or rate variances. Any production volume varlances are written off to Cost of Goods Sold in the
year it occurs.
Unit Data
Beginning Inventory
Production
Budgeted Production
Sales
Variable costs
Manufacturing cost per unit produced
Operating (marketing) cost per unit sold
Fixed costs
Manufacturing costs
Operating (marketing) costs
Selling price per unit
$
ss
$
$
ss
$
$
2021
10
900
1,200
880
350 $
40 $
69,600 $
8,400 $
800 $
2022
30
1,000
1,200
950
355
42
69,600
8,400
800
Required
a. Prepare a statement of comprehensive income for each year using variable costing and
absorption costing.
b.
Reconcile the difference between the operating incomes for each year; ensure to report
the number of units for beginning and ending inventory for Fixed Manufacturing costs.
Speedy
Motors assembles and sells motor vehicles and uses standard costing. Actual data relating to April and May
2020
are as follows:
LOADING...
(Click
the icon to view the data.)
The selling price per vehicle is
$25,000.
The budgeted level of production used to calculate the budgeted fixed manufacturing cost per unit is
500
units. There are no price, efficiency, or spending variances. Any production-volume variance is written off to cost of goods sold in the month in which it occurs.
Read the
requirements
LOADING...
.
Requirement 1. Prepare April and May
2020
income statements for
Speedy
Motors under (a) variable costing and (b) absorption costing.
(a) Prepare April and May
2020
income statements for
Speedy
Motors under variable costing. Complete the top half of the income statement for each month first, then complete the bottom portion. (Complete all input fields. Enter a "0" for any zero balance accounts.)
April 2020
May 2020…
Chapter 9 Solutions
COST ACCOUNTING
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...
Ch. 9 - Prob. 9.11QCh. 9 - Describe the downward demand spiral and its...Ch. 9 - Will the financial statements of a company always...Ch. 9 - Prob. 9.14QCh. 9 - The difference between practical capacity and...Ch. 9 - In comparing the absorption and variable cost...Ch. 9 - Queen Sales, Inc. has just completed its first...Ch. 9 - King Tooling has produced and sold the following...Ch. 9 - The following information relates to Drexler Inc.s...Ch. 9 - Prob. 9.20MCQCh. 9 - Variable and absorption costing, explaining...Ch. 9 - Throughput costing (continuation of 9-21). The...Ch. 9 - Variable and absorption costing, explaining...Ch. 9 - Throughput costing (continuation of 9-23). The...Ch. 9 - Variable versus absorption costing. The Tomlinson...Ch. 9 - Absorption and variable costing. (CMA) Miami,...Ch. 9 - Absorption versus variable costing. Horace Company...Ch. 9 - Candyland uses standard costing to produce a...Ch. 9 - Capacity management, denominator-level capacity...Ch. 9 - Denominator-level problem. Thunder Bolt Inc., is a...Ch. 9 - Variable and absorption costing and breakeven...Ch. 9 - Variable costing versus absorption costing. The...Ch. 9 - Throughput Costing (continuation of 9-32) 1....Ch. 9 - Variable costing and absorption costing, the Z-Var...Ch. 9 - Comparison of variable costing and absorption...Ch. 9 - Effects of differing production levels on...Ch. 9 - Alternative denominator-level capacity concepts,...Ch. 9 - Motivational considerations in denominator-level...Ch. 9 - Denominator-level choices, changes in inventory...Ch. 9 - Variable and absorption costing and breakeven...Ch. 9 - Downward demand spiral. Market.com is about to...Ch. 9 - Absorption costing and production-volume...Ch. 9 - Operating income effects of denominator-level...Ch. 9 - Variable and absorption costing, actual costing....Ch. 9 - Prob. 9.45PCh. 9 - Cost allocation, responsibility accounting, ethics...Ch. 9 - Absorption, variable, and throughput costing....Ch. 9 - Costing methods and variances, comprehensive. Rob...
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What is variance analysis?; Author: Corporate finance institute;https://www.youtube.com/watch?v=SMTa1lZu7Qw;License: Standard YouTube License, CC-BY