Accnt Hw P6-12 - P6­12 1 a b Direct Materials Direct Labor...

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Unformatted text preview: P6­12 1) a. b. Direct Materials Direct Labor Variable Man. Overhead Fixed Man. Overhead Absorption costing unit product cost High Country, Inc Income Statement Sales Cost of Goods Sold Gross Margin Selling and Administrative Expenses Net Operating Income 2) a. b. Direct Materials Direct Labor Variable Man. Overhead Variable Costing unit product cost High Country, Inc. Income Statement Sales Variable Expenses: Variable cost of goods sold Variable selling and administrative expense Total Variable expenses Contribution margin Fixed expenses: Fixed manufacturing overhead Fixed selling and administrative expense Total fixed expenses Net operating income (loss) 3) $20 $8 $2 $10 <­ 100,000/10,000 $40 $600,000 320000 280000 248000 $32,000 $20 $8 $2 $30 $600,000 240000 48000 288000 312,000 100,000 200,000 300,000 $12,000 There is a differenece of $20,000 on the reported net operating income. This occurs because variable costing takes all of the fixed manufacturing overhead as an expense in the current period, whereas absorption costing will defer some of that overhead if all the products arent sold. In this case, fixed overhead for absorption costing was $80000, and for variable costing was $100,000. ...
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This note was uploaded on 09/04/2011 for the course ECON 161 taught by Professor Jamesbaker during the Fall '11 term at University of Houston.

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