Question

U R U POP Drum Set u Sabian AA 18 inch.. Como coloca tus P. 50/100 Orden de les ebook portland main Show Me How Calculator Absorption and Variable Costing Income Statements for Two Months and Analys During the first month of operations ended uly 31, Head Gear Inc, manufactured 6.400 hats, of which 5.200 were sold Operating data for the month are summarized as follows: Sales $104,000 Manufacturing costs Direct materials $47,360 Direct labor 22.400 Variable manufacturing cost 12,160 Fixed manufacturing cost 15.360 97.280 Selling and administrative expenses: Varlable $10.920 Flowed 5,200 16,120 During August. Head Gear the manufactured 4.000 h and sold 5.200 hats Opening data for use d as for Sales $104.000 Manufacturing costs: Direct materials $29.500 Direct labor Vaneming Fixed manufacturing cost Selling and strative s Variable 5.200 $10.920 Required: 10. Prepare incontie statement for sudy using the absorption costing concept Header Absorption conting income Statement Chu My Watches

Answer 1

Answer 1a:

104000 Head Gear Inc. Absorption Costing Income Statement For the Month Ended July 31 Sales Cost of goods sold: Cost of goods manufactured 97280 Inventory, July 31 18240 Total cost of goods sold Gross profit Selling and administrative expenses Income from operations 79040 24960 16120 8840

Cost per unit = Total manufacturing costs / Units produced
Cost per unit = $97,280 / 6,400
Cost per unit = $15.20

Cost of ending inventory = Cost per unit * Units in ending inventory
Cost of ending inventory = $15.20 * 1,200
Cost of ending inventory = $18,240

Answer 1b:

104000 Head Gear Inc. Absorption Costing Income Statement For the Month Ended August 31 Sales Cost of goods sold: Inventory, August 1 18240 Cost of goods manufactured 66560 Total cost of goods sold Gross profit Selling and administrative expenses Income from operations 84800 19200 16120 3080

Answer 2a:

104000 Head Gear Inc. Variable Costing Income Statement For the Month Ended July 31 Sales Variable cost of goods sold: Variable cost of goods manufactured 81920 Inventory, July 31 15360 Total variable cost of goods manufactured Manufacturing margin Variable selling and administrative expenses Contribution margin Fixed costs: Fixed manufacturing costs 15360 Fixed selling and administrative expenses 5200 Total fixed costs Income from operations 66560 37440 10920 26520 20560 5960

Variable manufacturing costs = Direct materials + Direct labor + Variable manufacturing cost
Variable manufacturing costs = $47,360 + $22,400 + $12,160
Variable manufacturing costs = $81,920

Variable cost per unit = Variable manufacturing costs / Units produced
Variable cost per unit = $81,920 / 6,400
Variable cost per unit = $12.80

Cost of ending inventory = Variable cost per unit * Units in ending inventory
Cost of ending inventory = $12.80 * 1,200
Cost of ending inventory = $15,360

Answer 2b:

104000 Head Gear Inc. Variable Costing Income Statement For the Month Ended August 31 Sales Variable cost of goods sold: Inventory, August 1 15360 Variable cost of goods manufactured 51200 Total variable cost of goods manufactured Manufacturing margin Variable selling and administrative expenses Contribution margin Fixed costs: Fixed manufacturing costs 15360 Fixed selling and administrative expenses 5200 Total fixed costs Income from operations 66560 37440 10920 26520 20560 5960

Variable manufacturing costs = Direct materials + Direct labor + Variable manufacturing cost
Variable manufacturing costs = $29,600 + $14,000 + $7,600
Variable manufacturing costs = $51,200

Answer 3a:

For July, operating income reported under variable costing is less than absorption costing due to part of fixed manufacturing costs that are expensed.

Answer 3b:

Variable selling and administrative expenses

Answer 4:

Head Gear Inc. was equally profitable in July and in August under the variable costing concept. The difference in operating income reported under the absorption costing concept is due to allocating fixed manufacturing cost to July 31 ending inventory.