1.Variable manufacturing cost per unit = Direct material + Direct labor + Variable manufacturing overhead | |
=10.25+4.05+1.20 | |
15.5 | per unit |
2.Variable costing income statement | |
Sales revenue | 53,460 |
Variable manufacturing cost | 25,110 |
Variable selling and admin expenses | 810 |
Total variable cost | 25,920 |
Contribution Margin | 27,540 |
Fixed manufacturing overhead | 19,140 |
Fixed selling and admin expenses | 5,600 |
Total fixed costs | 24,740 |
Net Operating Income | 2,800 |
3.Full manufacturing cost per unit = Material + labor + overhead | |
=10.25+4.05+1.20+19140/1740 | |
26.5 | per unit |
4.Absorption costing income statement | |
Sales revenue | 53,460 |
Less: Cost of goods sold | 42,930 |
Gross Margin | 10,530 |
Selling and Admin expenses | 6,410 |
Net operating income | 4,120 |
6.Variable costing will be higher by (19140/1740)*(1840-1740) | |
=$1100 |
Dance Creations manufactures authentic Hawaiian hula skirts that are purchased for traditional Hawaiian celebrations, costume parties,...
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