WK 5 Cost Allocation

# WK 5 Cost Allocation - Charles Blackstone ACC/561...

This preview shows pages 1–3. Sign up to view the full content.

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Charles Blackstone ACC/561 ACCOUNTING (Cost Allocation) March 7, 2011 13-B3 Comparison of Variable Costing and Absorption Costing Consider the following information pertaining to a years operations of Youngstown Manufacturing: Units sold 1,400 Units produced 1,600 *Direct labor \$4,200 *Direct materials used 3,500 *Fixed manufacturing overhead 2,200 *Variable manufacturing overhead 300 Selling and administrative expenses (all fixed) 700 Beginning inventories 0 Contribution margin 5,600 Direct-material inventory, end 800 There are no work-in-process inventories. 1. What is the ending finished-goods inventory cost under absorption costing? \$1,275 Solution: *Add the DMU, DL,VMO, and FMO = \$10,200 Multiply \$10,200 x 200 (difference of units produced and those sold) /units produced (1,600) 2. What is the ending finished-goods inventory cost under variable costing? \$1,000 Solution: *Add the DMU,DL,and VMO ( and no FMO) = \$8,000 Multiply \$8,000 x 200 /units produced (1,600) 13-45 Variable and Absorption Costing...
View Full Document

## This note was uploaded on 06/13/2011 for the course ACCT561 SH2MB906 taught by Professor Nathanielmanning during the Spring '09 term at University of Phoenix.

### Page1 / 5

WK 5 Cost Allocation - Charles Blackstone ACC/561...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online