Homework Answers
1.
Calculate the full absorption cost per unit as follows:
Workings:
2.
Calculate the variable cost per unit as follows:
Workings:
3.
Calculate the selling price using the full absorption cost per unit as follows:
Workings:
4.
Prepare the absorption costing income statement as follows:
Workings:
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The Joe Echo Company (JEC) is a start-up company and just launched the design for a...
Variable and Absorption Costing Chandler Company sells its product for $100 per unit. Variable manufacturing costs...
Variable and Absorption Costing Chandler Company sells its product for $100 per unit. Variable manufacturing costs per unit are $40, and fixed manufacturing costs at the normal operating level of 10,000 units are $240,000. Variable selling expenses are $16 per unit sold. Fixed administrative expenses total $104,000. Chandler had no beginning inventory in 2019. During 2019, the company produced 10,000 units and sold 8,000. Would net income for Chandler Company in 2019 be higher if calculated using variable costing or...
Problem 7. Hanks Corporation produces a single product. Operating data for the company and its absorption...
Problem 7. Hanks Corporation produces a single product. Operating data for the company and its absorption costing income statements for the last two years are presented below Units in beginning inventory Units produced Units sold Year Year 2 0 1,000 9,0009,000 8,000 10,000 YearYear 2 $80,000 $100,000 48,000 60,000 32,000 40,000 Selling and administrative expenses 28,000 30,000 S4,000 $10,000 Sales Cost of goods sold Gross margin Net operating income Variable manufacturing costs are $4 per unit. Fixed manufacturing overhead was...
Show all supporting computations. 1. Hurst Co, manufacturers and sells a single product. Price and cost...
Show all supporting computations. 1. Hurst Co, manufacturers and sells a single product. Price and cost data regarding this product are as follows: Selling price.. Variable manufacturing costs.............. Variable selling and administrative expenses........ Fixed manufacturing overhead....... Fixed selling and administrative expenses......... $40 per unit $20 per unit $6 per unit $208,000 per year $324.000 per year a. What is Hurst's Contribution Margin per unit? What is their contribution Margin Ratio? b. What is Hurst's break-even point in Units and in...
Whitman Company has just completed its first year of operations. The company's absorption costing income statement...
Whitman Company has just completed its first year of operations. The company's absorption costing income statement for the year appears below: Whitman Company Income Statement Sales (39,000 units * $42.10 per unit) Cost of goods sold (39,000 units * $22 per unit) $1,641,900 858,000 Gross margin Selling and administrative expenses 783,900 448,500 Net operating income $335,400 The company's selling and administrative expenses consist of $292,500 per year in fixed expenses and $4 per unit sold in variable expenses. The $22...
Variable and Absorption Costing Chandler Company sells its product for $104 per unit. Variable manufacturing costs...
Variable and Absorption Costing Chandler Company sells its product for $104 per unit. Variable manufacturing costs per unit are 545, and fixed manufacturing costs at the normal operating level of 12,000 units are $240,000. Variable selling expenses are $15 per unit sold. Fixed administrative expenses total $104,000. Chandler had no beginning inventory in 2016. During 2016, the company produced 12,000 units and sold 9,000. Would net income for Chandler Company in 2016 be higher if calculated using variable costing or...
Shawnee Motors Inc. assembles and sells MP3 players. The company began operations on August 1 and...
Shawnee Motors Inc. assembles and sells MP3 players. The company began operations on August 1 and operated at 100% of capacity during the first month. The following data summarize the results for August: Sales (8,000 units) $1,200,000 Production costs (10,000 units): Direct materials $555,000 Direct labor 266,000 Variable factory overhead 133,000 Fixed factory overhead 89,000 1,043,000 Selling and administrative expenses: Variable selling and administrative expenses $161,700 Fixed selling and administrative expenses 62,600 224,300 If required, round interim per-unit calculations to...
1. Use the income statements on the Absorption Statement and Variable Statement to complete the following...
1. Use the income statements on the Absorption Statement and Variable Statement to complete the following table for the original production level. Then prepare similar income statements at a production level 10,000 units higher and add that information to the table. Assume that total fixed costs, unit variable costs, unit sales price, and the sales levels are the same at both production levels. Operating Income Original Production Level-Absorption Original Production Level-Variable Additional 10,000 Units-Absorption Additional 10,000 Units-Variable $310,000 $250,000 $...
Whitman Company has just completed its first year of operations. The company’s absorption costing income statement...
Whitman Company has just completed its first year of operations.
The company’s absorption costing income statement for the year
appears below:
Whitman Company
Income Statement
Sales (42,000 units
× $41.10 per unit)
$
1,726,200
Cost of goods sold
(42,000 units × $21 per unit)
882,000
Gross margin
844,200
Selling and
administrative expenses
525,000
Net operating
income
$
319,200
The company’s selling and administrative expenses consist of
$315,000 per year in fixed expenses and $5 per unit sold in...
Variable vs. Absorption Costing Selling price per unit 50.00 No Video for this worksheet $ Mandturing...
Variable vs. Absorption Costing Selling price per unit 50.00 No Video for this worksheet $ Mandturing cost Variable per unit produced: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead per year 11.00 6.00 REQUIRED: Calculate the unit cost and prepare a traditional Income statements using absorption costing. Calculate the unit cost and prepare a variable costing Income statement. Check your work using the values on the check figure tab. $ 120,000 Selling and administrative expenses Variable per unit...
Variable vs. Absorption Costing $ 50.00 No Video for this worksheet Selling price per unit Manufacturing...
Variable vs. Absorption Costing $ 50.00 No Video for this worksheet Selling price per unit Manufacturing costs Variable per unit produced: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead per year $ 11.00 REQUIRED: Calculate the unit cost and prepare a traditional 6.00 $ 3.00 120,000 Selling and administrative expenses Variable per unit sold Fixed per year $ 4.00 70,000 Year 1 Units in beginning inventory Units produced during the year Units sold during the year Units in...
Variable and Absorption Costing Chandler Company sells its product for $100 per unit. Variable manufacturing costs per unit are $40, and fixed manufacturing costs at the normal operating level of 10,000 units are $240,000. Variable selling expenses are $16 per unit sold. Fixed administrative expenses total $104,000. Chandler had no beginning inventory in 2019. During 2019, the company produced 10,000 units and sold 8,000. Would net income for Chandler Company in 2019 be higher if calculated using variable costing or...
Problem 7. Hanks Corporation produces a single product. Operating data for the company and its absorption costing income statements for the last two years are presented below Units in beginning inventory Units produced Units sold Year Year 2 0 1,000 9,0009,000 8,000 10,000 YearYear 2 $80,000 $100,000 48,000 60,000 32,000 40,000 Selling and administrative expenses 28,000 30,000 S4,000 $10,000 Sales Cost of goods sold Gross margin Net operating income Variable manufacturing costs are $4 per unit. Fixed manufacturing overhead was...
Show all supporting computations. 1. Hurst Co, manufacturers and sells a single product. Price and cost data regarding this product are as follows: Selling price.. Variable manufacturing costs.............. Variable selling and administrative expenses........ Fixed manufacturing overhead....... Fixed selling and administrative expenses......... $40 per unit $20 per unit $6 per unit $208,000 per year $324.000 per year a. What is Hurst's Contribution Margin per unit? What is their contribution Margin Ratio? b. What is Hurst's break-even point in Units and in...
Whitman Company has just completed its first year of operations. The company's absorption costing income statement for the year appears below: Whitman Company Income Statement Sales (39,000 units * $42.10 per unit) Cost of goods sold (39,000 units * $22 per unit) $1,641,900 858,000 Gross margin Selling and administrative expenses 783,900 448,500 Net operating income $335,400 The company's selling and administrative expenses consist of $292,500 per year in fixed expenses and $4 per unit sold in variable expenses. The $22...
Variable and Absorption Costing Chandler Company sells its product for $104 per unit. Variable manufacturing costs per unit are 545, and fixed manufacturing costs at the normal operating level of 12,000 units are $240,000. Variable selling expenses are $15 per unit sold. Fixed administrative expenses total $104,000. Chandler had no beginning inventory in 2016. During 2016, the company produced 12,000 units and sold 9,000. Would net income for Chandler Company in 2016 be higher if calculated using variable costing or...
Shawnee Motors Inc. assembles and sells MP3 players. The company began operations on August 1 and operated at 100% of capacity during the first month. The following data summarize the results for August: Sales (8,000 units) $1,200,000 Production costs (10,000 units): Direct materials $555,000 Direct labor 266,000 Variable factory overhead 133,000 Fixed factory overhead 89,000 1,043,000 Selling and administrative expenses: Variable selling and administrative expenses $161,700 Fixed selling and administrative expenses 62,600 224,300 If required, round interim per-unit calculations to...
Whitman Company has just completed its first year of operations.
The company’s absorption costing income statement for the year
appears below:
Whitman Company
Income Statement
Sales (42,000 units
× $41.10 per unit)
$
1,726,200
Cost of goods sold
(42,000 units × $21 per unit)
882,000
Gross margin
844,200
Selling and
administrative expenses
525,000
Net operating
income
$
319,200
The company’s selling and administrative expenses consist of
$315,000 per year in fixed expenses and $5 per unit sold in...
Variable vs. Absorption Costing Selling price per unit 50.00 No Video for this worksheet $ Mandturing cost Variable per unit produced: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead per year 11.00 6.00 REQUIRED: Calculate the unit cost and prepare a traditional Income statements using absorption costing. Calculate the unit cost and prepare a variable costing Income statement. Check your work using the values on the check figure tab. $ 120,000 Selling and administrative expenses Variable per unit...
Variable vs. Absorption Costing $ 50.00 No Video for this worksheet Selling price per unit Manufacturing costs Variable per unit produced: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead per year $ 11.00 REQUIRED: Calculate the unit cost and prepare a traditional 6.00 $ 3.00 120,000 Selling and administrative expenses Variable per unit sold Fixed per year $ 4.00 70,000 Year 1 Units in beginning inventory Units produced during the year Units sold during the year Units in...
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