1a.
Direct materials | 7.20 |
Direct labor | 6.80 |
Variable manufacturing overhead | 2.00 |
Fixed manufacturing overhead ($252000/31500) | 8.00 |
Unit product cost $ | 24.00 |
1b.
Tami's Creations, Inc. | |
Absorption Costing Income Statement | |
Total | |
Sales (28500 units) | 1140000 |
Cost of goods sold (28500 x $24.00) | 684000 |
Gross profit | 456000 |
Selling and administrative [$245925 + (28500 x $6.95)] | 444000 |
Net operating income (loss) $ | 12000 |
1c.
Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes | |
Variable costing net operating income (loss) $ | -12000 |
Add: Fixed manufacturing overhead cost deferred in ending inventory under absorption costing [(31500 - 28500) x $8.00] | 24000 |
Absorption costing net operating income (loss) $ | 12000 |
3a.
Tami's Creations, Inc. | ||
Variable Costing Income Statement | ||
Sales revenue ($1140000 x 34500/28500) | 1380000 | |
Less: Variable expenses | ||
Variable cost of goods sold (34500 x $16.00) | 552000 | |
Variable selling and administrative expenses (34500 x $6.95) | 239775 | |
791775 | ||
Contribution margin | 588225 | |
Less: Fixed expenses | ||
Fixed manufacturing overhead | 252000 | |
Fixed selling and administrative expenses | 245925 | |
497925 | ||
Net operating income (loss) $ | 90300 |
3b.
Tami's Creations, Inc. | |
Absorption Costing Income Statement | |
Total | |
Sales (34500 units) | 1380000 |
Cost of goods sold (34500 x $24.00) | 828000 |
Gross profit | 552000 |
Selling and administrative [$245925 + (34500 x $6.95)] | 485700 |
Net operating income (loss) $ | 66300 |
3c.
Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes | |
Variable costing net operating income (loss) $ | 90300 |
Less: Fixed manufacturing overhead cost released from beginning inventory (3000 x $8.00) | -24000 |
Absorption costing net operating income (loss) $ | 66300 |
Tami Tyler opened Tami's Creations, Inc., a small manufacturing company, at the beginning of the year....
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. $ 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. $ 1,148,000 Tami's Creations, Inc. Income Statement For the Quarter Ended March 31 Sales (28,700 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 $1,138,000 Tami's Creations, Inc. Income Statement For the Quarter Ended March 31 Sales (28,450 units) Variable expenses: Variable cost of goods...
Chapter 6 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. $ 1,144,000 Tami's Creations, Inc. Income Statement For the Quarter Ended March 31 Sales (28,600 units) Variable expenses: Variable...
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...
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. 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. $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...
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...