Question

Accustart Stage Supplies is a manufacturer of a specialized type of light used in theaters. Information on the first 3 years of business is as follows: 2017 2018 2019 Total Units sold 4,650 4,650 4,650 13,950 Units produced 4,650 5,580 3,720 13,950 Fixed production costs $62,496 $62,496 $62,496 Variable production costs per unit $78 $78 $78 Selling price per unit $229 $229 $229 Fixed selling and administrative expense $4,700 $4,700 $4,700

(a) Your answer is partially correct. Try again. Calculate profit and the value of ending inventory for each year using full costing. (Round cost per unit to 2 decimal places, e.g. 15.25 and other answers to 0 decimal places, e.g. 125.) 2017 2018 2019 Cost per unit $ $ $ Net profit $ $ $ Ending inventory $ $ $ SHOW SOLUTION LINK TO TEXT LINK TO TEXT Attempts: 3 of 3 used

(b) Calculate profit and the value of ending inventory for each year using variable costing. 2017 2018 2019 Net profit $ $ $ Ending inventory $ $ $

Answer 1

income statement (full costing)
particular	2017		2018		2019
	total	per unit	total	per unit	total	per unit
sale	10,64,850		10,64,850		10,64,850
less: cost of goods sold
variable production cost	3,62,700	78	3,62,700	78	3,62,700
fixed production cost	62,496	13.44	52,080	11.2	10,416 (930 x 11.2)            62,496 (3,720 x 16.8)	16.8 (62,496/3,720)
gross profit	6,39,654		6,50,070		6,29,238
fixed selling and administrative cost	4,700		4,700		4,700
net profit	6,34,954		6,45,370		6,24,538
ending inventory	-	-	82,956 (930 x 89.2)		-

	2017	2018	2019
cost per unit	91.44	89.2	94.8
net profit	6,34,954	6,45,370	6,24,538
ending inventory	-	82,956	-

income statement (variable costing)
particular	2017		2018		2019
	total	per unit	total	per unit	total	per unit
sale	10,64,850		10,64,850		10,64,850
less: variable cost
variable production cost	3,62,700	78	3,62,700	78	3,62,700	78
contribution margin	7,02,150		7,02,150		7,02,150
less: fixed cost
fixed production cost	62,496		62,496		62,496
fixed selling and administrative cost	4,700		4,700		4,700
net profit	6,34,954		6,34,954		6,34,954
ending inventory			72,540 (930 x 78)

	2017	2018	2019
net profit	6,34,954	6,34,954	6,34,954
ending inventory	-	72,540	-