1.
A.Unit product cost under Absorption costing
Direct materials | $7.60 |
Direct Labour | $7.90 |
Variable manufacturing overhead | $1.80 |
Fixed manufacturing overhead($252,800/31,600) | $8 |
Absorption costing unit product costs | $25.3 |
B. Absorption costing income statement
Sales | $1,144,000 |
Cost of goods sold (28,600×$25.3) | ($723,580) |
Gross margin | $420,420 |
Selling and administrative ($191,620+$216,800) | ($408,420) |
Net operating income | $12,000 |
C. Reconciliation of Variable costing and Absorption costing net operating income
Variable costing net operating loss | ($12,000) |
Add: Fixed manufacturing overhead cost deffered in inventory (3,000 units ×$8) | $24,000 |
Absorption costing net operating income | $12,000 |
* Units in Ending inventory =0 units+ 31,600-28,600=3,000 units
3.
A. Variable costing income statement
Sales (34,600×40) | $1,384,000 | |
Less: Variable expenses | ||
Variable cost of goods sold (34,600×17.3) | $598,580 | |
Variable selling and administrative(34,600×6.70) | $231,820 | |
($830,400) | ||
Contribution margin | $553,600 | |
Fixed expenses: | ||
Fixed manufacturing overhead | $252,000 | |
Fixed selling and administrative | $216,800 | $469,600 |
Net operating income | $84,000 |
B. Absorption costing income statement
Sales | $1,384,000 |
Cost of goods sold (34,600×$25.3) | ($875,380) |
Gross margin | $508,620 |
Selling and administrative expense (34,600×$6.70 +$216,800) | ($448,620) |
Net operating income | $60,000 |
C. Reconciliation of Variable costing and Absorption costing net operating income
Variable costing net operating income | $84,000 |
Deduct: Fixed manufacturing overhead cost released from inventory under Absorption costing (3,000×8) | ($24,000) |
Absorption costing net operating income | $60,000 |
* Units in Ending inventory. = Beginning inventory + units produced- units sold
= 3,000+31,600-34,600 = 0 units
_____×_____
All the best
Chapter 6 Tami Tyler opened Tami's Creations, Inc., a small manufacturing company, at the beginning of...
Tami Tyler opened Tami's Creations, Inc., a small manufacturing company, at the beginning of the year. Getting the company through its first quarter of operations placed a considerable strain on Ms. Tyler's personal finances. The following income statement for the first quarter was prepared by a friend who has just completed a course in managerial accounting at State University. $ 1,148,000 Tami's Creations, Inc. Income Statement For the Quarter Ended March 31 Sales (28,700 units) Variable expenses: Variable cost of...
NOTE all are part of question 5 Tami Tyler opened Tami's Creations, Inc., a small manufacturing company, at the beginning of the year. Getting the company through its first quarter of operations placed a considerable strain on Ms. Tyler's personal finances. The following income statement for the first quarter was prepared by a friend who has just completed a course in managerial accounting at State University 25 points X 04:38:41 $ 1,120,000 Tami's Creations, Inc. Income Statement For the Quarter...
Tami Tyler opened Tami's Creations, Inc., a small manufacturing company, at the beginning of the year. Getting the company through its first quarter of operations placed a considerable strain on Ms. Tyler's personal finances. The following income statement for the first quarter was prepared by a friend who has just completed a course in managerial accounting at State University. $ 1,124,000 Tami's Creations, Inc. Income Statement For the Quarter Ended March 31 Sales (28,100 units) Variable expenses: Variable cost of...
Tami Tyler opened Tami's Creations, Inc., a small manufacturing company, at the beginning of the year. Getting the company through its first quarter of operations placed a considerable strain on Ms. Tyler's personal finances. The following income statement for the first quarter was prepared by a friend who has just completed a course in managerial accounting at State University. $1,140,000 Tami's Creations, Inc. Income Statement For the Quarter Ended March 31 Sales (28,500 units) Variable expenses Variable cost of goods...
Tami Tyler opened Tami's Creations, Inc., a small manufacturing company, at the beginning of the year. Getting the company through its first quarter of operations placed a considerable strain on Ms. Tyler's personal finances. The following income statement for the first quarter was prepared by a friend who has just completed a course in managerial accounting at State University Tani's Creations. Inc. Income Statement For the Quarter Ended Warch 31 Sales (28.300 wita) $ 1.132.000 Variable expenses Variable cost of...
Tami Tyler opened Tami's Creations, Inc., a small manufacturing company, at the beginning of the year. Getting the company through its first quarter of operations placed a considerable strain on Ms. Tyler's personal finances. The following income statement for the first quarter was prepared by a friend who has just completed a course in managerial accounting at State University. Tami's Creations, Inc. Income Statement For the Quarter Ended March 31 Sales (28,600 units) $1,144,000 Variable expenses: Variable cost of goods...
Tami Tyler opened Tami’s Creations, Inc., a small manufacturing company, at the beginning of the year. Getting the company through its first quarter of operations placed a considerable strain on Ms. Tyler’s personal finances. The following income statement for the first quarter was prepared by a friend who has just completed a course in managerial accounting at State University. Tami Tyler opened Tami's Creations, Inc., a small manufacturing company, at the beginning of the year. Getting the company through its...
Tami Tyler opened Tami's Creations, Inc., a small manufacturing company, at the beginning of the year. Getting the company through its first quarter of operations placed a considerable strain on Ms. Tyler's personal finances. The following income statement for the first quarter was prepared by a friend who has just completed a course in managerial accounting at State University $1,138,000 Tami's Creations, Inc. Income Statement For the Quarter Ended March 31 Sales (28,450 units) Variable expenses: Variable cost of goods...
Taml Tyler opened Tami's Creations, Inc., a small manufacturing company, at the beginning of the year. Getting the company through its first quarter of operations placed a considerable strain on Ms. Tyler's personal finances. The following income statement for the first quarter was prepared by a friend who has just completed a course in managerial accounting at State University. Tami's Creations, Inc. Income Statement For the Quarter Ended March 31 Sales (29,000 units) $1,160,000 Variable expenses : Variable cost of...
Tami Tyler opened Tami's Creations, Inc., a small manufacturing company, at the beginning of the year. Getting the company through its first quarter of operations placed a considerable strain on Ms. Tyler's personal finances. The following income statement for the first quarter was prepared by a friend who has just completed a course in managerial accounting at State University Tami's Creations, Inc. Income Statement For the Quarter Ended March 31 $ 1,132.00e Sales (28,30e units) Variable expenses: Variable cost of...