2 and 3 Complete this question by entering your answers in the tabs below.Required 1 Required 2 Required 3Reconcile the absorption costing and the variable costing net operating income figures for each year.Reconciliation of Variable Costing and Absorption Costing Net Operating IncomesYear 1Variable costing net operating income (loss)Add (deduct) fixed manufacturing overhead deferred in (released from) inventoryAbsorption costing net operating incomeYear 2 During Heaton Company's first two years of operations, It reported absorption costing net operating Income as follows:Year 1Year 2Sales (@ $63 per unit)$ 1,638,000Cost of goods sold (@$34 per unit)884,000$ 1,008,000544,000464,000293,000Gross margin754,000Selling and administrative expenses*323,000Net operating income$ 171,000$ 431,000*$3 per unit variable: $245,000 fixed each year.The company's $34 unit product cost is computed as follows:Direct materialsDirect laborVariable manufacturing overheadFixed manufacturing overhead ($252,000+ 21,000 units)Absorption costing unit product costProduction and cost data for the first two years of operations are:Year 1Year 2Units produced21,00021,000Units sold16,00026,000Required:1. Using variable costing, what is the unit product cost for both years?2. What is the variable costing net operating Income In Year 1 and in Year 2?3. Reconcile the absorption costing and the variable costing net operating Income figures for each year.Complete this question by entering your answers in the tabs below.Required 1Required 2 Required 3What is the variable costing net operating income in Year 1 and in Year 2? (Loss amounts should be indicated with a minussign.)Year 1Year 2Net operating income (loss)$910312$34

The cost per unit is calculated as total cost divided by number of units. Using variable costing the…

Complete this question by entering your answers in the tabs below. tequired 1 Required 2 Required 3 econcile the absorption costing and the variable costing net operating income figures for each year. Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes Year 1 riable costing net operating income (loss) di (deduct) fixed manufacturing overhead deferred in (released from) inventory sorption costing net operating income Year 2

Complete this question by entering your answers in the tabs below. tequired 1 Required 2 Required 3 econcile the absorption costing and the variable costing net operating income figures for each year. Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes Year 1 riable costing net operating income (loss) di (deduct) fixed manufacturing overhead deferred in (released from) inventory sorption costing net operating income Year 2

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter4: Accounting For Factory Overhead

Section: Chapter Questions

Problem 4P: Using the data in P4-2 and Microsoft Excel: 1. Separate the variable and fixed elements. 2....

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Using the data in P4-2 and Microsoft Excel: 1. Separate the variable and fixed elements. 2. Determine the cost to be charged to the product for the year. 3. Determine the cost to be charged to factory overhead for the year. 4. Determine the plotted data points using Chart Wizard. 5. Determine R2. 6. How do these solutions compare to the solutions in P4-2 and P4-3? 7. What does R2 tell you about this cost model?
Summarized data for Walrus Co. for its first year of operations are: A. Prepare an income statement under absorption costing B. Prepare an income statement under variable costing
Lynch Company manufactures and sells a single product. The following costs were incurred during the company's first year of operations: Variable costs per unit: Manufacturing: Direct materials 14 Direct labor 3 Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative 1 2$ 1 $330,000 $240,000 During the year, the company produced 33,000 units and sold 24,000 units. The selling price of the company's product is $44 per unit. Required: 1. Assume that the company uses absorption costing: a. Compute the unit product cot. b. Prepare an income statement for the year. 2. Assume that the company uses variable costing: a. Compute the unit product cost. b. Prepare an income statement for the year.
Denton Company manufactures and sells a single product. Cost data for the product are given: Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Total variable cost per unit Fixed costs per month: Fixed manufacturing overhead Fixed selling and administrative Total fixed cost per month The product sells for $46 per unit. Production and sales data for July and August, the first two months of operations, follow: July August Units Produced Units Sold 14,000 22,000 The company's Accounting Department has prepared the following absorption costing income statements for July and August: July August $ 644,000 $ 1,012,000 308,000 336,000 203,000 $ 133,000 18,000 18,000 Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income $3 11 4 2 $ 20 a. Absorption costing b. Variable costing $ 72,000 175,000 $ 247,000 Required: 1. Determine the unit product cost under: a. Absorption costing. b.…
Great Outdoze Company manufactures sleeping bags, which sell for $66.10 each. The variable costs of production are as follows: Direct material Direct labor Variable manufacturing overhead $19.10 10.30 7.40 k Budgeted fixed overhead in 20x1 was $157,500 and budgeted production was 25,000 sleeping bags. The year's actual production was 25,000 units, of which 21,300 were sold. Variable selling and administrative costs were $1.30 per unit sold; fixed selling and administrative costs were $22,000. at
Instruction: Read each problem carefully ana proviue h n Prob Problem 1. Classify each of the following costs of Bug Company in two ways: (a) as variable (V) fixed costs (F); (b) as inventoriable costs (I) or period costs (P): Example: Direct labor 1. Salary of company 2. Fire insurance on direct materials controller 3. Property taxes on finished goods held for sale 4. Direct materials used tico of 5. Factory.renty p 6. Sales Commissions R 7. Overtime premium of machine operators 8. Straight-line depreciation of Factory equipment 9. Straight-line depreciation of trucks used for delivery R. of sales to customers 10. Salary of factory supervisor 16
Smoky Mountain Corporation makes two types of hiking boots-the Xtreme and the Pathfinder. Data concerning these two product lines appear below: Xtreme $ 121.00 $ 64.70 $ 10.80 Pathfinder Selling price per unit Direct materials per unit Direct labor per unit Direct labor-hours per unit Estimated annual production and sales $ 88.00 $ 54.00 %24 9.00 1.0 DLHS 71,000 units 1.2 DLHS 25, 000 units The company has a traditional costing system in which manufacturing overhead is applied to units based on direct labor-hours. Data concerning manufacturing overhead and direct labor-hours for the upcoming year appear below: Estimated total manufacturing overhead Estimated total direct labor-hours $ 2,020,000 101,000 DLH5 Required: 1. Compute the product margins for the Xtreme and the Pathfinder products under the company's traditional costing system. 2. The company is considering replacing its traditional costing system with an activity-based costing system that would assign its manufacturing…
REQUIRED Prepare the Income Statement of Abbey Limited for the month ended 31 March 2023 using the following methods: 2.1 Absorption costing 2.2 Variable costing INFORMATION The following information was extracted from the accounting records of Abbey Limited for the month ended 31 March 2023: Inventory on 01 March 2023 Production Sales Selling price per unit Manufacturing costs: Fixed manufacturing overheads costs Direct materials cost per unit Direct labour cost per unit Variable manufacturing overheads costs per unit Marketing costs: Advertising Sales personnel's salaries and commission Delivery costs Administration costs: Salaries Other office costs Nil 50 000 units 40 000 units R200 R480 000 R40 R24 R16 R32 000 per month R36 000 per month plus 5% of sales R24 per unit sold R80 000 per month R32 000 per month plus R16 per unit sold
Ida Company produces a handcrafted musical instrument called a gamelan that is similar to a xylophone. The gamelans are sold for $880. Selected data for the company's operations last year follow: Units in beginning inventory Units produced Units sold 280 240 Units in ending inventory Variable costs per unit: 40 Direct materials 115 2$ 2$ 2$ Direct labor 335 Variable manufacturing overhead Variable selling and administrative Fixed costs: 35 25 Fixed manufacturing overhead Fixed selling and administrative $ 63,000 $ 23,000 The absorption costing income statement prepared by the company's accountant for last year appears below: $ 211,200 170,400 40,800 29,000 Sales Cost of goods sold Gross margin Selling and administrative expense Net operating income $ 11,800 Required: 1. Under absorption costing, how much fixed manufacturing overhead cost is included in the company's inventory at the end of last year? 2. Prepare an income statement for last year using variable costing.
Lynch Company manufactures and sells a single product. The following costs were incurred during the company's first year of operations: Variable costs per unit: Manufacturing: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative 24 24 24 11 1 1 $330,000 $240,000 During the year, the company produced 30,000 units and sold 23,000 units. The selling price of the company's product is $43 per unit. Required: 1. Assume that the company uses absorption costing: a. Compute the unit product cost. b. Prepare an income statement for the year. 2. Assume that the company uses variable costing: a. Compute the unit product cost. b. Prepare an income statement for the year.
Required information Exercise 7-3 Reconciliation of Absorption and Variable Costing Net Operating Incomes (LO7-3] [The following information applies to the questions displayed below.] Jorgansen Lighting, Inc., manufactures heavy-duty street lighting systems for municipalities. The company uses variable costing for internal management reports and absorption costing for external reports to shareholders, creditors, and the government. The company has provided the following data: Year 1 Year 2 Year 3 Inventories Beginning (units) Ending (units) Variable costing net operating income 200 160 200 210 160 230 $290,000 $269,000 $250,000 The company's fixed manufacturing overhead per unit was constant at $500 for all three years.
QUESTION 2 REQUIRED Use the information given below to prepare the Income statement of Kendall Manufacturers for October 2023 using the following methods: 2.1 Marginal costing 2.2 Absorption costing. INFORMATION The following information was provided by Kendall Manufacturers for the only product produced during October 2023: Opening inventory Number of units manufactured Sales Selling price per unit Variable manufacturing costs per unit Fixed manufacturing overhead cost Variable selling cost per unit Fixed selling cost Fixed administrative cost Nil 5 000 R4 200 000 R1 000 R425 R325 000 R80 R175 000 R200 000