Homework Answers
Operating profit is $271,000 using variable costing and $286,000 using absorption costing.
| Income Statement - Variable Costing | ||
| Production | 15000 | |
| Sales | 12000 | |
| Per Unit | Total | |
| Sales | 50 | 600000 |
| Direct Material | 8.00 | 120000 |
| Direct Labor | 6.00 | 90000 |
| Variable Manufacturing Overhead | 2.00 | 30000 |
| Toal manufactuiring Costs | 16.00 | 240000 |
| Less: Ending Inventory(3,000 x 16) | 48000 | |
| Variable cost of goods sold | 192000 | |
| Variable Selling and Admn. Expenses | 1.00 | 12000 |
| Total Varibale Costs | 17.00 | 204000 |
| Contribution Margin | 33.00 | 396000 |
| Fixed Expenses | ||
| Manufacturing costs | 75000 | |
| Selling and Admin. Expenses | 50000 | |
| Total Fixed Expenses | 125000 | |
| Operating Profit | 271000 | |
| Income Statement - Absorption Costing | ||
| Production | 15000 | |
| Sales | 12000 | |
| Per Unit | Total | |
| Sales | 50 | 600000 |
| Direct Material | 8.00 | 120000 |
| Direct Labor | 6.00 | 90000 |
| Variable Manufacturing Overhead | 2.00 | 30000 |
| Fixed Manufacturing Overhead | 5.00 | 75000 |
| Toal manufactuiring Overheads | 21.00 | 315000 |
| Less: Ending Inventory(3,000 x 21) | 63000 | |
| Cos of goods sold | 252000 | |
| Gross Profit | 348000 | |
| Selling amd Adn. Expenses | ||
| Variable expenses | 1.00 | 12000 |
| Fixed Expenses | 50000 | |
| Total Selling and Admn. Expenses | 62000 | |
| Operating Profit | 286000 | |
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During the company's first year of operations, Perry, Inc. produced 15,000 units during...
Consider the following information for Presidio Inc.'s most recent year of operations. Number of units produced...
Consider the following information for Presidio Inc.'s most
recent year of operations.
Number of units produced
2,900
Number of units sold
1,700
Sales price per unit
$
790.00
Direct materials per unit
75.00
Direct labor per unit
105.00
Variable manufacturing overhead per unit
55.00
Fixed manufacturing overhead per unit ($346,550 ÷ 2,900
units)
119.50
Total variable selling expenses ($12 per unit sold)
20,400.00
Total fixed general and administrative expenses
90,000.00
Required:
2-a. Complete a full absorption costing income statement
for...
During Heaton Company's first two years of operations, it reported absorption costing net operating income as...
During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales (@ $62 per unit) Cost of goods sold (@ $37 per unit) Gross margin Selling and administrative expenses* Net operating income Year 1 $ 1,054, 000 629,000 425,000 298,000 $ \127,000 Year 2 $ 1,674,000 999,000 675,000 328,000 $ 347,000 * $3 per unit variable; $247,000 fixed each year. The company's $37 unit product cost is computed as follows: ta Direct materials...
company's operations last year follow 7.14 points 250 235 Skipped Units in beginning inventory Units produced...
company's operations last year follow 7.14 points 250 235 Skipped Units in beginning inventory Units produced Units sold Units in ending inventory Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs: Fixed manufacturing overhead Fixed selling and administrative $ $ 135 345 $ 20 $65,000 $25,000 The absorption costing income statement prepared by the company's accountant for last year appears below Sales Cost of goods sold Gross margin Selling and administrative expense...
Absorption and Variable Costing with Over- and Underapplied Overhead Flaherty, Inc., has just completed its first year of operations. The unit costs on a normal costing basis are as follows: Manufa...
Absorption and Variable Costing with Over- and Underapplied Overhead Flaherty, Inc., has just completed its first year of operations. The unit costs on a normal costing basis are as follows: Manufacturing costs (per unit): Direct materials (2 lbs. @ 1.25) $2.50 Direct labor (0.4 hr. @ 15.00) 6.00 Variable overhead (0.4 hr. @ 5.00) 2.00 Fixed overhead (0.4 hr. @ 7.00) 2.80 Total $13.30 Selling and administrative costs: Variable $1.80 per unit Fixed $221,500 During the year, the company had...
Problem 6. Italia Espresso Machina Inc. produces a single product. Data concerning the company's operations last...
Problem 6. Italia Espresso Machina Inc. produces a single product. Data concerning the company's operations last year appear below Units in beginning inventory Units produced Units sold 2,000 1,900 Selling price per unit $100 Variable costs per unit Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative $30 $10 $5 $2 Fixed costs in total Fixed manufacturing overhead Fixed selling and administrative 40,000 $60,000 Required a. Compute the unit product cost under both absorption and variable costing b....
Lavender Inc has the following information for its first year of operations: Units produced Units sold...
Lavender Inc has the following information for its first year of operations: Units produced Units sold Unit sales price Direct material per unit Direct labor per unit Variable manufacturing overhead per unit Fixed manufacturing overhead Variable selling expenses Fixed selling and administrative expenses 4,800 3,840 $ 210.00 $ 42.00 $ 52.50 $ 10.50 $120,000 $ 10.50 $ 27,000 a. Prepare Lavender's full absorption costing income statement. (Do not round your intermediate calculations. Round your answers to nearest dollar amounts.) b....
During Heaton Company's first two years of operations, it reported absorption costing net operating income as...
During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales (@ $61 per unit) Cost of goods sold (@ $39 per unit) Gross margin Selling and administrative expenses* Net operating income Year 1 $ 1,098,000 702,000 396,000 307,000 89,000 Year 2 $1,708,000 1,092,000 616,000 337,000 $ 279,000 * $3 per unit variable; $253,000 fixed each year. The company's $39 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing...
Trez Company began operations this year. During this first year, the company produced 100,000 units and...
Trez Company began operations this year. During this first year, the company produced 100,000 units and sold 80.000 units. The absorption costing Income statement for this year follows Sales (80,000 units 550 per unit) $4,000,000 Cost of goods sold Beginning inventory $ e Cost of goods manufactured (100,000 units * $38 per unit) 3, eee,eee Cost of goods available for sale 3,600,000 Ending inventory (20,000 $30) 600,000 Cost of goods sold 2,480,ce Gross margin 1,680,000 Selling and administrative expenses 560,...
Absorption and Variable Costing with Over- and Underapplied Overhead Flaherty, Inc., has just completed its first year of operations. The unit costs on a normal costing basis are as follows: Manufactu...
Absorption and Variable Costing with Over- and Underapplied Overhead Flaherty, Inc., has just completed its first year of operations. The unit costs on a normal costing basis are as follows: Manufacturing costs (per unit): Direct materials (3 lbs. @ 1.30) $3.90 Direct labor (0.4 hr. @ 17.50) 7.00 Variable overhead (0.4 hr. @ 4.00) 1.60 Fixed overhead (0.4 hr. @ 6.00) 2.40 Total $14.90 Selling and administrative costs: Variable $1.60 per unit Fixed $217,500 During the year, the company had...
During Heaton Company's first two years of operations, it reported absorption costing net operating income as...
During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales (@ $60 per unit) Cost of goods sold (@ $37 per unit) Gross margin Selling and administrative expenses* Net operating income Year 1 $ 1,020,000 629,000 391,000 297,000 $ 194,000 Year 2 $ 1,620,000 999,000 621,000 327,000 $ 294,000 *$3 per unit variable: $246,000 fixed each year. The company's $37 unit product cost is computed as follows: Direct materials Direct labor Variable...
Consider the following information for Presidio Inc.'s most
recent year of operations.
Number of units produced
2,900
Number of units sold
1,700
Sales price per unit
$
790.00
Direct materials per unit
75.00
Direct labor per unit
105.00
Variable manufacturing overhead per unit
55.00
Fixed manufacturing overhead per unit ($346,550 ÷ 2,900
units)
119.50
Total variable selling expenses ($12 per unit sold)
20,400.00
Total fixed general and administrative expenses
90,000.00
Required:
2-a. Complete a full absorption costing income statement
for...
During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales (@ $62 per unit) Cost of goods sold (@ $37 per unit) Gross margin Selling and administrative expenses* Net operating income Year 1 $ 1,054, 000 629,000 425,000 298,000 $ \127,000 Year 2 $ 1,674,000 999,000 675,000 328,000 $ 347,000 * $3 per unit variable; $247,000 fixed each year. The company's $37 unit product cost is computed as follows: ta Direct materials...
company's operations last year follow 7.14 points 250 235 Skipped Units in beginning inventory Units produced Units sold Units in ending inventory Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs: Fixed manufacturing overhead Fixed selling and administrative $ $ 135 345 $ 20 $65,000 $25,000 The absorption costing income statement prepared by the company's accountant for last year appears below Sales Cost of goods sold Gross margin Selling and administrative expense...
Problem 6. Italia Espresso Machina Inc. produces a single product. Data concerning the company's operations last year appear below Units in beginning inventory Units produced Units sold 2,000 1,900 Selling price per unit $100 Variable costs per unit Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative $30 $10 $5 $2 Fixed costs in total Fixed manufacturing overhead Fixed selling and administrative 40,000 $60,000 Required a. Compute the unit product cost under both absorption and variable costing b....
Lavender Inc has the following information for its first year of operations: Units produced Units sold Unit sales price Direct material per unit Direct labor per unit Variable manufacturing overhead per unit Fixed manufacturing overhead Variable selling expenses Fixed selling and administrative expenses 4,800 3,840 $ 210.00 $ 42.00 $ 52.50 $ 10.50 $120,000 $ 10.50 $ 27,000 a. Prepare Lavender's full absorption costing income statement. (Do not round your intermediate calculations. Round your answers to nearest dollar amounts.) b....
During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales (@ $61 per unit) Cost of goods sold (@ $39 per unit) Gross margin Selling and administrative expenses* Net operating income Year 1 $ 1,098,000 702,000 396,000 307,000 89,000 Year 2 $1,708,000 1,092,000 616,000 337,000 $ 279,000 * $3 per unit variable; $253,000 fixed each year. The company's $39 unit product cost is computed as follows: Direct materials Direct labor Variable manufacturing...
Trez Company began operations this year. During this first year, the company produced 100,000 units and sold 80.000 units. The absorption costing Income statement for this year follows Sales (80,000 units 550 per unit) $4,000,000 Cost of goods sold Beginning inventory $ e Cost of goods manufactured (100,000 units * $38 per unit) 3, eee,eee Cost of goods available for sale 3,600,000 Ending inventory (20,000 $30) 600,000 Cost of goods sold 2,480,ce Gross margin 1,680,000 Selling and administrative expenses 560,...
During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales (@ $60 per unit) Cost of goods sold (@ $37 per unit) Gross margin Selling and administrative expenses* Net operating income Year 1 $ 1,020,000 629,000 391,000 297,000 $ 194,000 Year 2 $ 1,620,000 999,000 621,000 327,000 $ 294,000 *$3 per unit variable: $246,000 fixed each year. The company's $37 unit product cost is computed as follows: Direct materials Direct labor Variable...
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