3.25 ch15%20extra%20egs%20solns0

3.25 ch15%20extra%20egs%20solns0 - 165 000 less Ending...

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ACIS222 Absorption and Variable Costing Solutions to Extra Problems
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2 (a) Medina Ltd Absorption Costing Income Statement For the year ended 31 December Sales (13 800 × $30) $414 000 Less: Cost of goods sold (13 800 × $17.70) 244 260 Gross margin $169 740 Less: Selling and admin. expenses 70 300 Net income $ 99 440
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3 (b) Medina Ltd Variable Costing Income Statement For the year ended 31 December Sales (13 800 × $30) $414 000 Less variable expenses: Cost of goods sold (13 800 × $14.50) $200 100 Selling (13 800 × $3.50) 48 300 248 400 Contribution margin $165 600 Less fixed expenses: Overhead $ 48 000 Selling and admin. 22 000 70 000 Net income
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4 (c) Reconciliation Production (units) 15 000 - Sales (units) 13 800 Increase in inventory 1 200 × Fixed overhead rate ($48 000/15 000) x $3.20 Difference $ 3 840
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5 (a) Sugarsmooth Ltd Statement of Cost of Goods Sold for the year ended 31 December $ Beginning inventory 0 add Cost of goods manufactured
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Unformatted text preview: 165 000 less Ending inventory 4 500 Normal cost of goods sold 160 500 add Under-applied overhead 10 000 Adjusted cost of goods sold $170 500 6 (b) Calculations Variable unit cost = $3.00 $0.50 = $2.50 COGM = $2.50 x 55 000 = $137 500 Ending inventory = $2.50 x (55 000 53 500) = $3 750 Variable COGS = 53 500 x $2.50 or ($0 + $137 500 $3 750) = $133 750 FOH = ($0.50 x 55 000) + 10 000 = $37 500 7 (b) Sugarsmooth Ltd Variable Costing Income Statement for the year ended 31 December $ Sales (53,500 units x $8.50) 454 750 Less: Cost of goods sold (133 750 ) Contribution margin 321 000 Less:Fixed overhead (37 500 ) Selling and admin. Exp. (120000 ) Net income $163 500 8 (c) Reconciliation Production (units) 55 000-Sales (units) 53 500 Increase in inventory 1 500 Fixed overhead rate x $0.50 Difference $ 750...
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3.25 ch15%20extra%20egs%20solns0 - 165 000 less Ending...

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