Homework Answers
1.If sale and Production are the same
Answer:C
Net income will be same under both methods.
2.If number of units produced grater than number units sold
Answer:A
Absorption costing will yield a higher net income.
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ssuming the number of units sold and produced are the same (Sales = Production), which of...
Lukin Corporation reports the following first year production cost information: Units produced Units sold Sales price...
Lukin Corporation reports the following first year production cost information: Units produced Units sold Sales price Direct labor Direct materials Variable overhead Fixed overhead Operating expenses 62,000 units 59,000 units $350 per unit $41 per unit $15 per unit $9,300,000 in total $4,340,000 in total $1,000,000 a. Compute production cost per unit under variable costing. b. Compute production cost per unit under absorption costing. c. Determine the net income using variable costing. d. Determine the net income using absorption costing.
The contribution margin income statement is structured to emphasize what? Cost Functionality Cost Behavior Organizational Efficiency...
The contribution margin income statement is structured to emphasize what? Cost Functionality Cost Behavior Organizational Efficiency Cost Drivers Which of the following statements is correct When an equal number of units are produced and sold, net income is significantly higher under the absorption costing than variable costing When an equal number of units are produced and sold, net income is higher under variable costing that absorption costing When an equal number of units are produced and sold, net income is...
In the current year, TGIT Corp. produced 10,000 units and sold 8,000 of the units. The...
In the current year, TGIT Corp. produced 10,000 units and sold 8,000 of the units. The company incurred the following costs: Direct materials used $120,000 Direct labour cost 68,000 Variable manufacturing overhead 40,000 Fixed manufacturing overhead 60,000 Fixed selling and admin. expense 45,000 Variable selling and admin. expense 36,000 There was no beginning finished goods inventory and no beginning or ending work-in-process inventory. Use the information provided to answer the following questions: aa) Without doing any calculations, would net income...
Select all the correct statements regarding a time period in which the number of units produced...
Select all the correct statements regarding a time period in which the number of units produced equals the number of units sold. (Check all that apply.) Check all that apply. Absorption costing total expense is less than variable costing total expense. Absorption costing net income is equal to variable costing net income. Absorption costing net income is less than variable costing net income. Absorption costing total expense is greater than variable costing total expense. Absorption costing net income is greater...
Production and cost data for the first two years of operations are: Units produced Units sold...
Production and cost data for the first two years of operations are: Units produced Units sold Year 1 22,000 17,000 Year 2 22,000 27,000 Required: 1. Using variable costing, what is the unit product cost for both years? 2. What is the variable costing net operating income in Year 1 and in Year 2? 3. Reconcile the absorption costing and the variable costing net operating income figures for each year. Complete this question by entering your answers in the tabs...
Data Table January 2018 0 Units produced and sold: Sales 800 meals Production Variable manufacturing cost...
Data Table January 2018 0 Units produced and sold: Sales 800 meals Production Variable manufacturing cost per meal Sales commission cost per meal Total fixed manufacturing overhead Total fixed selling and administrative costs 1,000 meals 5 650 400 Print Done Maria's Foods produces frozen meals that It sells for $12 each. The company computes a new monthly produces frozen meals that it sells for $12 each. The company computes a new monthly foxed manufacturing overhead allocation rate based on the...
3 Information: 5 Number of Units Produced 6 Number of units Sold 3200 3200 $48 per...
3 Information: 5 Number of Units Produced 6 Number of units Sold 3200 3200 $48 per unit $26 per unit Cost of Goods Sold Detail: Direct materials Direct Labor Manufacturing Overhead: Rent on Factory Building Depreciation on Equipment Other Expen Salaries for Rent of Offic Depreciation Commission 8 Revenue per unit $275 per unit $25,000 total 10 12 A) Traditional Absorption Costing Income Statement B) Contribution Margin Income Statement income Statement using Variable Costing) Calculate Total variable Total fixed cc...
6. (20 Points) Lukin Corporation reports the following first year production cost information: Units produced Units...
6. (20 Points) Lukin Corporation reports the following first year production cost information: Units produced Units sold Sales price Direct labor Direct materials Variable overhead Fixed overhead Operating expenses 62,000 units 59,000 units $350 per unit $41 per unit $15 per unit $9,300,000 in total $4,340,000 in total $1,000,000 a. Compute production cost per unit under variable costing. b. Compute production cost per unit under absorption costing. c. Determine the net income using variable costing. d. Determine the net income...
3,000 2,500 350 $ Number of units produced Number of units sold Unit sales price Direct...
3,000 2,500 350 $ Number of units produced Number of units sold Unit sales price Direct materials per unit Direct labor per unit Variable manufacturing overhead per unit Fixed manufacturing overhead per unit ($225,000 - 3,000 units) Total variable selling expenses ($15 per unit sold) Total fixed general and administrative expenses 80 60 10 75 37,500 65,000 Required: Prepare Crystal Cold's full absorption costing income statement and variable costing income statement for the year. CRYSTAL COLD COOLERS INC. Full Absorption...
Lehighton Chalk Company manufactures sidewalk chalk, which it sells online by the box at $25 per...
Lehighton Chalk
Company manufactures sidewalk chalk, which it sells online by the
box at $25 per unit. Lehighton uses an actual costing system, which
means that the actual costs of direct material, direct labor, and
manufacturing overhead are entered into work-in-process inventory.
The actual application rate for manufacturing overhead is computed
each year; actual manufacturing overhead is divided by actual
production (in units) to compute the application rate. Information
for Lehighton’s first two years of operation is as follows:
Year...
Lukin Corporation reports the following first year production cost information: Units produced Units sold Sales price Direct labor Direct materials Variable overhead Fixed overhead Operating expenses 62,000 units 59,000 units $350 per unit $41 per unit $15 per unit $9,300,000 in total $4,340,000 in total $1,000,000 a. Compute production cost per unit under variable costing. b. Compute production cost per unit under absorption costing. c. Determine the net income using variable costing. d. Determine the net income using absorption costing.
Select all the correct statements regarding a time period in which the number of units produced equals the number of units sold. (Check all that apply.) Check all that apply. Absorption costing total expense is less than variable costing total expense. Absorption costing net income is equal to variable costing net income. Absorption costing net income is less than variable costing net income. Absorption costing total expense is greater than variable costing total expense. Absorption costing net income is greater...
Production and cost data for the first two years of operations are: Units produced Units sold Year 1 22,000 17,000 Year 2 22,000 27,000 Required: 1. Using variable costing, what is the unit product cost for both years? 2. What is the variable costing net operating income in Year 1 and in Year 2? 3. Reconcile the absorption costing and the variable costing net operating income figures for each year. Complete this question by entering your answers in the tabs...
Data Table January 2018 0 Units produced and sold: Sales 800 meals Production Variable manufacturing cost per meal Sales commission cost per meal Total fixed manufacturing overhead Total fixed selling and administrative costs 1,000 meals 5 650 400 Print Done Maria's Foods produces frozen meals that It sells for $12 each. The company computes a new monthly produces frozen meals that it sells for $12 each. The company computes a new monthly foxed manufacturing overhead allocation rate based on the...
3 Information: 5 Number of Units Produced 6 Number of units Sold 3200 3200 $48 per unit $26 per unit Cost of Goods Sold Detail: Direct materials Direct Labor Manufacturing Overhead: Rent on Factory Building Depreciation on Equipment Other Expen Salaries for Rent of Offic Depreciation Commission 8 Revenue per unit $275 per unit $25,000 total 10 12 A) Traditional Absorption Costing Income Statement B) Contribution Margin Income Statement income Statement using Variable Costing) Calculate Total variable Total fixed cc...
6. (20 Points) Lukin Corporation reports the following first year production cost information: Units produced Units sold Sales price Direct labor Direct materials Variable overhead Fixed overhead Operating expenses 62,000 units 59,000 units $350 per unit $41 per unit $15 per unit $9,300,000 in total $4,340,000 in total $1,000,000 a. Compute production cost per unit under variable costing. b. Compute production cost per unit under absorption costing. c. Determine the net income using variable costing. d. Determine the net income...
3,000 2,500 350 $ Number of units produced Number of units sold Unit sales price Direct materials per unit Direct labor per unit Variable manufacturing overhead per unit Fixed manufacturing overhead per unit ($225,000 - 3,000 units) Total variable selling expenses ($15 per unit sold) Total fixed general and administrative expenses 80 60 10 75 37,500 65,000 Required: Prepare Crystal Cold's full absorption costing income statement and variable costing income statement for the year. CRYSTAL COLD COOLERS INC. Full Absorption...
Lehighton Chalk
Company manufactures sidewalk chalk, which it sells online by the
box at $25 per unit. Lehighton uses an actual costing system, which
means that the actual costs of direct material, direct labor, and
manufacturing overhead are entered into work-in-process inventory.
The actual application rate for manufacturing overhead is computed
each year; actual manufacturing overhead is divided by actual
production (in units) to compute the application rate. Information
for Lehighton’s first two years of operation is as follows:
Year...
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