CH09-Day 2 HO - Copyright Rowland Atiase 2016 Problems...

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Successful Project Management
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Chapter 7 / Exercise 7
Successful Project Management
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Copyright © Rowland Atiase, 2016 Problems HO #4 (1) Variable Costing Income Statements:                            2011                                                          2012                                        Sales    1,000 units            Sales       1,200 units       Production       1,400 units            Production     1,000 units Revenues ($3 per unit)     $3,000          $3,600 Variable Costs:           Beginning Inventory          $       0 $     200      Variable cost of goods manufactured          700        500      Cost of goods available for sale   700        700      Deduct ending inventory a                        (200)       (100)      Variable cost of goods sold   500         600      Variable operating costs                 1,000       1,200   Variable costs                   1,500                                  1,800 Contribution Margin       1,500            1,800 Fixed Costs:      Fixed manufacturing costs   700        700      Fixed operating costs                    400        400 Total fixed costs          1,100            1,100 Operating income  $      400         $    700 Unit inventoriable costs:      Year 1: $700 / 1,400 = $0.50 per unit; $0.50 x (1,400 – 1,000)      Year 2: $500 / 1,000 = $0.50 per unit; $0.50 x (400 + 1,000 – 1,200)
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Successful Project Management
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Chapter 7 / Exercise 7
Successful Project Management
Clements/Gido
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Copyright © Rowland Atiase, 2016 (2) Absorption-costing income statements:                            2011                                                          2012                                        Sales    1,000 units            Sales       1,200 units       Production       1,400 units            Production     1,000 units Revenues ($3 per unit)     $3,000          $3,600 Cost of goods sold:           Beginning Inventory          $       0 $     400      Variable manufacturing costs               700        500      Fixed manufacturing costs a                       700            700

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