Chapter 5

Chapter 5 - Problem 5-18A 1. The unit product cost under...

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Problem 5-18A  1. The unit product cost under the variable costing method is  computed as follows: Direct materials. ....................................... $ 8 Direct labor. ............................................. 10 Variable manufacturing overhead. ...........       2    Unit product cost. ..................................... $20 With this figure, the variable costing income statements can be  prepared: Year 1 Year 2 Sales. ............................................................ $1,000,000 $1,500,000 Less variable expenses: Variable cost of goods sold (20,000 units x  $20 per unit; 30,000 units x $20 per unit) 400,000 600,000 Variable selling and administrative (20,000  units x $3 per unit; 30,000 units x $3 per  unit). .........................................................             60,000                 90,000     Total variable expenses. ................................         460,000             690,000     Contribution margin. ......................................         540,000             810,000
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Chapter 5 - Problem 5-18A 1. The unit product cost under...

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