Homework Answers
1. Generally the companies follow variable costing method to value the closing stock and fixed expenses are charged to income statement.
therefore cost will include direct material cost, direct labour and variable overheads. Therefore , valuation of closing stock shall include material , labour and overheads .
Per unit cost acceptable for balance sheet reporting = $7.27 ( 2.85+1.92+1.6+ 180000/200000)
Closing Stock = Opening stock + manufactured - goods sold
= 8200+200000-204300
= 3900 units
Value of closing stock = 3900* 7.27 = 28353
2. Absorption costing operating Income
Sales = 204300*$9 = $ 18,38,700
less: Cost of goods sold
opening inventory ( 8200 *7.27) =$ 59614
Production cost ( 200000* 7.27) = $ 1454000
cost of goods availble for sale = 1513614
less: value of closing stock = 3900 * 7.27 = 28353 = 1485261
Gross profit =353439
Less : Selling & distribution expenses
0.9 * 200000+ 96000 =276000
profit = 77439
3. Variable costing per unit
Direct Material = 2.85
Direct Labour = 1.92
Variable overhead = 1.60
= 6.37
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Variable-Costing and Absorption-Costing Income Borques Company produces and sells wooden pallets that are used for moving...
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Variable-Costing and Absorption-Costing Income
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for moving and stacking materials. The operating costs for the past
year were as follows:
Variable costs per unit:
Direct materials
$ 2.85
Direct labor
$ 1.92
Variable overhead
$ 1.60
Variable selling
$ 0.90
Fixed costs per year:
Fixed overhead
$180,000
Selling and administrative
$ 96,000
During the year, Borques produced 200,000 wooden pallets and
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Complete Absorption Costing vs. Variable Costing Income statements for Randeris Company, Year 1 & Year 2....
Complete Absorption Costing vs. Variable Costing Income
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Variable vs. Absorption Costing $ 50.00 No Video for this worksheet Selling price per unit Manufacturing...
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#1 #2 Absorption-Costing Income Statement During the most recent year, Osterman Company had the following data:...
#1
#2
Absorption-Costing Income Statement
During the most recent year, Osterman Company had the following
data:
Units in beginning inventory
—
Units produced
10,000
Units sold ($47 per unit)
9,300
Variable costs per unit:
Direct materials
$9
Direct labor
$6
Variable overhead
$4
Fixed costs:
Fixed overhead per unit produced
$5
Fixed selling and administrative
$138,000
Required:
1. Calculate the cost of goods sold under
absorption costing.
$
2. Prepare an income statement using absorption
costing. Enter amounts as positive...
Required information Exercise 06-9 Income statement under absorption costing and variable costing LO P1, P2 The...
Required information Exercise 06-9 Income statement under absorption costing and variable costing LO P1, P2 The following information applies to the questions displayed below) Cool Sky reports the following costing data on its product for its first year of operations. During this first year, the company produced 40,000 units and sold 32,000 units at a price of $140 per unit Manufacturing costs Direct materials per unit Direct labor per unit Variable overhead per unit Fixed overhead for the year Selling...
Exercise 06-5 Absorption costing and variable costing income statements LO P2 Rey Company's single product sells...
Exercise 06-5 Absorption costing and variable costing income statements LO P2 Rey Company's single product sells at a price of $219 per unit. Data for its single product for its first year of operations follow Direct materials Direct labor Overhead costs 23 per unit 31 per unit 9 per unit $253,000 per year Variable overhead Fixed overhead per year Selling and administrative expenses Variable Fixed 21 per unit $206,000 per year 23,000 units Units produced and sold 1. Prepare an...
Required information Exercise 06-9 Income statement under absorption costing and variable costing LO P1, P2 The...
Required information Exercise 06-9 Income statement under absorption costing and variable costing LO P1, P2 The following information applies to the questions displayed below] Cool Sky reports the following costing data on its product for its first year of operations. During this first year, the company produced 44,000 units and sold 36,000 units ata price of $140 per unit. Manufacturing costs Direct materials per unit Direct labor per unit Variable overhead per unit Fixed overhead for the year Selling and...
Variable-Costing and Absorption-Costing Income
Borques Company produces and sells wooden pallets that are used
for moving and stacking materials. The operating costs for the past
year were as follows:
Variable costs per unit:
Direct materials
$ 2.85
Direct labor
$ 1.92
Variable overhead
$ 1.60
Variable selling
$ 0.90
Fixed costs per year:
Fixed overhead
$180,000
Selling and administrative
$ 96,000
During the year, Borques produced 200,000 wooden pallets and
sold 204,300 at $9 each. Borques had 8,200 pallets in...
Variable-Costing and Absorption-Costing Income Borgues Company produces and sells wooden pallets that are used for moving and stacking material. The operating costs for the past year were as follow Variable costs per unit: Direct materials Direct labor Variable overhead Variable selling $0.90 Fixed costs per year: Foed overhead $180,000 Selling and administrative $ 96,000 During the year, Boques produced 200,000 wooden palets and sold 200.300 a $9 each Borgestad 8.200 pes in beginning finished goods inventory costs have not changed...
Complete Absorption Costing vs. Variable Costing Income
statements for Randeris Company, Year 1 & Year 2.
RANDERIS COMPANY - YEAR ONE 30,000 25,000 30 $ $ 10 Number of units produced Number of units sold Unit sales price Variable costs per unit: Direct materials, direct labor variable mfg. overhead Selling & administrative expenses Fixed costs per year: Manufacturing overhead Selling & administrative expenses $ 3 $ 150,000 $100,000 RANDERIS COMPANY - YEAR TWO 20,000 25,000 5,000 30 $ Number of...
Review Problem 1: Contrasting Variable and Absorption Costing Dexter Corporation produces and sells a single product, a wooden hand loom for weaving small items such as scarves Selected cost and operating data relating to the product for two years are given below: Selling price per unit. $50 Manufacturing costs: Variable per unit produced: Direct materials. $11 Direct labor .......... Variable manufacturing overhead... Fixed manufacturing overhead per year ........ $120,000 Selling and administrative expenses: Variable per unit sold....... $4 Fixed per...
Variable vs. Absorption Costing Selling price per unit 50.00 No Video for this worksheet $ Mandturing cost Variable per unit produced: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead per year 11.00 6.00 REQUIRED: Calculate the unit cost and prepare a traditional Income statements using absorption costing. Calculate the unit cost and prepare a variable costing Income statement. Check your work using the values on the check figure tab. $ 120,000 Selling and administrative expenses Variable per unit...
Variable vs. Absorption Costing $ 50.00 No Video for this worksheet Selling price per unit Manufacturing costs Variable per unit produced: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead per year $ 11.00 REQUIRED: Calculate the unit cost and prepare a traditional 6.00 $ 3.00 120,000 Selling and administrative expenses Variable per unit sold Fixed per year $ 4.00 70,000 Year 1 Units in beginning inventory Units produced during the year Units sold during the year Units in...
#1
#2
Absorption-Costing Income Statement
During the most recent year, Osterman Company had the following
data:
Units in beginning inventory
—
Units produced
10,000
Units sold ($47 per unit)
9,300
Variable costs per unit:
Direct materials
$9
Direct labor
$6
Variable overhead
$4
Fixed costs:
Fixed overhead per unit produced
$5
Fixed selling and administrative
$138,000
Required:
1. Calculate the cost of goods sold under
absorption costing.
$
2. Prepare an income statement using absorption
costing. Enter amounts as positive...
Required information Exercise 06-9 Income statement under absorption costing and variable costing LO P1, P2 The following information applies to the questions displayed below) Cool Sky reports the following costing data on its product for its first year of operations. During this first year, the company produced 40,000 units and sold 32,000 units at a price of $140 per unit Manufacturing costs Direct materials per unit Direct labor per unit Variable overhead per unit Fixed overhead for the year Selling...
Exercise 06-5 Absorption costing and variable costing income statements LO P2 Rey Company's single product sells at a price of $219 per unit. Data for its single product for its first year of operations follow Direct materials Direct labor Overhead costs 23 per unit 31 per unit 9 per unit $253,000 per year Variable overhead Fixed overhead per year Selling and administrative expenses Variable Fixed 21 per unit $206,000 per year 23,000 units Units produced and sold 1. Prepare an...
Required information Exercise 06-9 Income statement under absorption costing and variable costing LO P1, P2 The following information applies to the questions displayed below] Cool Sky reports the following costing data on its product for its first year of operations. During this first year, the company produced 44,000 units and sold 36,000 units ata price of $140 per unit. Manufacturing costs Direct materials per unit Direct labor per unit Variable overhead per unit Fixed overhead for the year Selling and...
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