Question

X E21-16 (similar to) Question Help Vita Ade produced 15.000 cases of powdered and (545.000 manufacturing overhead and $25.000 wing and 12.000 in Apr 2018 The price was $26. variable costs were 18 The company had no beginning Finished Goods Inventory 16 marcurgand i ng and administrative and of cows were 70.000 Read the remonts Requirement 1. Prepare the April income and using rate costing * Requirements Vita Ade Income Statement Variable Costing Month Ended April 30, 2018 Not Sales Revenue Variable Costs Cost of Goods Sold: 1. Prepare the April income statement using variable costing 2. Determine the product cost per unit and the total cost of the 3.000 cases in Finished Goods Inventory as of April 30 Print Dono Variable Selling and Administrative Costs Contribution Margin Fred Costs: Fred Sealing and Administrative Costs Fuad Manufacturing Costs Operating income

Answer 1

Vita Ade ($)

1) Income statement (Variable cost)

Month ended April 30, 2018.

	$	$
Net sales revenue (12,000 cases @ $ 26 each)		312,000
Variable cost :
Cost of goods sold (12,000 cases @ $ 6 each)	72,000
Variable selling and administration cost (12,000 cases @ $ 2 each)	24,000	96,000
Contribution margin (sales - variable cost)		216,000
Fixed cost :
Fixed selling and administration cost	25,000
Fixed manufacturing cost ($45,000/15,000cases)×12,000 cases*	36,000	61,000
Operating income (contribution - fixed cost)		155,000

* Even though fixed cost is always constant in any level of production, the fixed manufacturing cost is allocated on predetermined rate.

2) Value of finished good inventories (3000 cases) as of April 30 :

	$	$
Manufacturing cost :
Variable cost (3000 cases @ $ 6 each)	18,000
Fixed cost (3000 cases @ $ 3* each)	9,000
Total production cost		27,000
Production cost per unit ($27,000/3000 cases)		9.00