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Nascar Motors assembles and sells motor vehicles and uses standard costing. Actual data and variable costing...

Nascar Motors assembles and sells motor vehicles and uses standard costing. Actual data and variable costing and absorption costing income statements relating to April and May 2017 are attached in photos.

Data Table ndard costing. Actual follows: scar Motors are as follows: furing costs per unit.) 5) ents.) April and May 2017 to

Ieud Steele 02/11/201:35 AM work: 5-1 My AccountingLab Homework: Chapter 9 Save pts 2 of 5 (0 complete) HW Score: 0%, 0 of 45

9-1 MyAccoutingLab Homework: Chapter 9 2 of 5 (0 complete) HW Score: 0%, 0 absorption costing income statements Question He D

The variable manufacturing cost per unit of Nascar Motors are as follows:

                                                                             April    May
Direct material cost per unit                     $6,500   6,500
Direct manufacturing labor cost per unit 1,800 1,800
Manufacturing overhead cost per unit     3,200   3,200

1. Prepare income statements for Nascar Motors in April and May 2017 under throughput costing.
2. Contrast the results in requirement 1 with the absorption and variable costing income statements presented.
3. Give one motivation for Nascar Motors to adopt throughput costing.

Data Table ndard costing. Actual follows: scar Motors are as follows: furing costs per unit.) 5) ents.) April and May 2017 tom portion (Comple 2017 April May Unit data: Beginning inventory Production 600 Sales 450 Variable costs Manufacturing cost per unit produced $ 11,500 $ 11,500 Operating (marketing) cost per unit sold 2,200 2.200 Fixed costs Manufacturing costs $ 2,400,000 $ 2,400,000 Operating (marketing) costs 750,000 750,000 The selling price per vehicle is $26,000. The budgeted level of production used to calculate the budgeted fixed manufacturing cost per unit is 600 units. There are no price, efficiency, or spending variances. Any production volume variance is written off to cost of goods sold in the month in which it occurs Print Done nd then click Check Answer.
Ieud Steele 02/11/201:35 AM work: 5-1 My AccountingLab Homework: Chapter 9 Save pts 2 of 5 (0 complete) HW Score: 0%, 0 of 45 pts milar to) i variable costing income statements Question Help assembles and sells motor vehicles and uses standard costing statements relating to April and May 2017 are as follows: con to view the data) con to view the variable costing income statements) con to view the absorption costing income statements.) April 2017 $11.700.000 May 2017 $ 17,550,000 Revenues $ 1. Prepare income statements for Nascar Motors in April and Ma leting the top portion of the statement, then the bottom portion Variable costs: Beginning inventory Variable manufacturing costs Cost of goods available for sale 1.725,000 6,325 000 6.900,000 6,900,000 (1.725,00D) 8,050,000 (287,500) April 2017 Less Ending inventory Vanable cost of goods sold 5.175,000 990,000 7,762 500 1.485.000 Variable operating costs Total variable costs 6 165,000 9,247,500 5,535,000 8,302,500 Contribution margin Fixed costs Foxed manufacturing costs 2,400,000 750 000 2,400,000 750.000 Foxed operating costs Total fixed costs 3.150.000 385.000 3,150,000 5 152 500 $ $ Print Done any list or enter any number in the input fields and then click Check Answer Clear All SEM pe here to search
9-1 MyAccoutingLab Homework: Chapter 9 2 of 5 (0 complete) HW Score: 0%, 0 absorption costing income statements Question He Dllows and sells motor vehicles and uses star relating to April and May 2017 are as the data ) the variable costing income statement the absorption costing income stateme April 2017 May 2017 Revenues $ 11,700,000 $ 17,550,000 Cost of goods sold Beginning inventory Variable manufactunng costs $ come statements for Nascar Motors ir 6,900,000 2,400,000 portion of the statement, then the bo Allocated fixed manufacturing costs Cost of goods available for sale Less Ending inventory 2,325.000 6,325 000 2,200 000 10,850 000 (387.500) April 9,300,000 (2,325,000) Adjustment for production volume variance 200,000 6.975,000 10,662 500 4.725,000 6,887,500 Cost of goods sold Gross margin Operating costs Variable operating costs 990,000 750,000 1,485,000 750,000 Fixed operating costs Total operating costs 1.740.000 2.235.000 $ 2985 000 $ 4,652,500 Operating income er any number in the input fields a Print Done Check Answer Clear All 1035 A 10
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Part 1

April 2017

May 2017

Revenues

11700000

17550000

Beginning inventory

0

975000

Direct materials in goods manufactured (6500*600); (6500*550)

3900000

3575000

Cost of goods available for sale

3900000

4550000

Deduct ending inventory (6500*(600-450); (6500*(150+550-675))

(975000)

(162500)

Total direct material cost of goods sold

2925000

4387500

Throughput margin

8775000

13162500

Manufacturing costs ((5000*600)+2400000); ((5000*550)+2400000)

5400000

5150000

Other operating costs ((2200*450)+750000); ((2200*675)+750000)

1740000

2235000

Operating income

1635000

5777500

Part 2

April

May

Variable costing

2385000

5152500

Absorption costing

2985000

4652500

Throughput costing

1635000

5777500

In April, throughput costing has the lowest operating income, whereas in May throughput costing has the highest operating income. Throughput costing puts greater emphasis on sales as the source of operating income than does either absorption or variable costing.

Part 3

Throughput costing puts a penalty on production without a corresponding sale in the same period. Costs other than direct materials that are variable with respect to production are expensed in the period of incurrence, whereas under variable costing they would be capitalized. As a result, throughput costing provides less incentive to produce for inventory than either variable costing or absorption costing.

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