c6-225-excel.odt

c6-225-excel.odt - 6 Variable and Absorption Costing 1...

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Unformatted text preview: ‘6) Variable and Absorption Costing 1. Using variable costing, compute unit product cost, breakeven, and prepare an income statement. 2. Using absorption costing, compute unit product cost, and prepare an income statement. Addison, Inc. makes a single product, an indoor fireplace. Data for last year is as follows: Selling price per fireplace $420 Manufacturing costs: Variable per unit produced: Direct materials 5135 Direct labor $43 Variable manufacturing overhead $37 Fixed manufacturing overhead per vear $210,000 Selling and administrative expenses: Variable per unit sold $45 Fixed per year $190,000 Units in beginning inventory 0 Units produced during the year 5,000 Units sold during the year 4,500 Use the data to answer the following. Replace every ? with a formula. 1. Assume the company uses variable costing: Compute the unit product cost for one fireplace ( $ 215 Sgl'es «I 5 1,390,000 Variable expenses: Variable cost of goods sold Variable selling and administrative expenses Contribution margin Fixed expenses: Fixed manufacturing overhead Fixed selling and administrative expenses Net operating income :Compute the number of fireplaces required to breakeuen «I 2,500 2. Assume the company uses absorption costing: Compute the unit product cost for one fireplace sf $ 25? Prepare an Income statement for the year Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income ...
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