Answer 1. | Calculation of cost per meal produced under absorption costing | |||
Units | per Unit | Total | ||
Variable Manufacturing cost | 6 | 1100 | $ 6,600 | |
Fixed manufacturing cost | $ 385 | |||
Total cost of manufacturing | $ 6,985 | |||
Units produced | 1100 | |||
Per unit cost of meal produced = $6985/1100 | $ 6.35 | |||
Answer 1. | Calculation of cost per meal produced under Variable costing | |||
Units | per Unit | Total | ||
Variable Manufacturing cost | 6 | 1100 | $ 6,600 | |
Total cost of manufacturing | $ 6,600 | |||
Units produced | 1100 | |||
Per unit cost of meal produced = $6600/1100 | $ 6.00 | |||
Answer 2a | Income Statement Under Absorption Costing | |||
Sale | 14 | 800 | $ 11,200 | |
Less: Cost of meal produced = 800 x 6.35 | 6.35 | 800 | $ 5,080 | |
Less: Sales commission | 2 | 800 | $ 1,600 | |
Less: Total fixed and administrative costs | $ 350 | |||
Net income | $ 4,170 | |||
Answer 2b | Income Statement Under Variable Costing | |||
Sale | 14 | 800 | $ 11,200 | |
Less: Cost of meal produced = 800 x 6 | 6 | 800 | $ 4,800 | |
Less: Sales commission | 2 | 800 | $ 1,600 | |
Contribution | $ 4,800 | |||
Less: Total fixed manufacturing overhead | $ 385 | |||
Less: Total fixed and administrative costs | $ 350 | |||
Net income | $ 4,065 |
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Maria's Foods produces frozen meals that it sells for $14 each. The company computes a new...
Maria's Foods produces frozen meals that it sells for $14 each. The company computes a new monthly fixed manufacturing overhead allocation rate based on the planned number of meals to be produced that month. Assume all costs and production levels are exactly as planned. The following data are from Maria's Foods's first month in business: Units produced and sold for January 2018: Sales=800meals Production=1100 meals Variable manufacturing cost per meal =$6 Sales commission cost per meal=$2 Total fixed manufacturing overhead=$385...
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