9 and 11 - Saikat Mitra Chapter 9 HW Cost Accounting 9-16 1...

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Saikat Mitra Chapter 9 HW Cost Accounting 9-16 1. Information for income statement computations are: April May Beginning inventory Production Goods available for sale Units sold Ending inventory 0 500 500 350 150 150 400 550 520 30 Budgeted Fixed Cost: April May (a) Budgeted fixed manufacturing costs (b) Budgeted production (c)=(a)÷(b) Budgeted fixed manufacturing cost per unit (d) Budgeted variable manufacturing cost per unit (e)=(c)+(d) Budgeted total manufacturing cost per unit $2,000,000 500 $4,000 $10,000 $14,000 $2,000,000 500 $4,000 $10,000 $14,000 (a) Variable costing April May Revenues (24000*350 & 520) Variable costs: Beginning inventory Variable manufacturing costs Cost of goods available for sale Deduct ending inventory Variable cost of goods sold Variable operating costs Total variable costs Contribution margin Fixed costs Fixed manufacturing costs Fixed operating costs Total fixed costs Operating income $ 0 5,000,000 5,000,000 (1,500,000) 3,500,000 1,050,000 2,000,000 600,000 $8,400,000 4,550,000 3,850,000 2,600,000 $1,250,000 $1,500,000 4,000,000 5,500,000 (300,000) 5,200,000 1,560,000 2,000,000 600,000 $12,480,000 6,760,000 5,720,000 2,600,000 $3,120,000 (b) Absorption costing: April May
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Revenues (24000*350 & 520) Cost of Goods Sold: Beginning inventory Variable manufacturing costs (1) Fixed Manu. Cost (2) Cost of goods available for sale Deduct ending inventory Adjustment for variance (3) Cost of Goods Sold Gross Margin Operating Costs: Variable operating costs (4) Fixed operating costs Total Operating costs Operating Income $ 0 5,000,000 2,000,000 7,000,000 (2,100,000) 0 1,050,000 600,000 $8,400,000 4,900,000 3,500,000 1,650,000 $1,850,000 $2,100,000 4,000,000 1,600,000 7,700,000 (420,000) 400,000 U 1,560,000 600,000 $12,480,000 7,680,000 4,800,000 2,160,000 $2,640,000 Works: $10,000 × 500; $10,000 × 400 $2,000,000 – $2,000,000; $2,000,000 – $1,600,000 $4,000 × 500; $4,000 × 400 f $3,000 × 350; $3,000 × 52 2 . Absorptioncosting operating income – Variablecosting operating income = Fixed manufacturing costs in ending inventory – Fixed manufacturing costsin beginning inventory April: $1,850,000 – $1,250,000 = ($4,000 × 150) – ($0) Or, $600,000 = $600,000 May: $2,640,000 – $3,120,000 = ($4,000 × 30) – ($4,000 × 150) Or, – $480,000 = $120,000 – $600,000 Or, – $480,000 = – $480,000 The difference between absorption and variable costing happened beacsue of moving fixed manufacturing costs into inventories. 9-23 1. Variable costing income statements: 2008 2009
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Revenues ($3 per unit) Variable costs: Beginning inventory Variable cost of goods manu. Cost of goods available for sale Deduct ending inventory * Variable cost of goods sold Variable operating costs Variable costs Contribution margin Fixed costs Fixed manufacturing costs Fixed operating costs Total fixed costs Operating income Sales Production $ 0 700 700 (200) 500 1,000 700 400 1,000 units 1,400 units $3,000 1,500 1,500 1,100 $ 400 Sales Production $ 200 500 700 (100) 600 1,200 700 400 1,200 units 1,000 units $3,600 1,800 1,800 1,100 $ 700 *Unit inventoriable costs: Year 1: $700 ÷ 1,400 = $0.50 per unit; $0.50 × (1,400 – 1,000) Year 2: $500 ÷ 1,000 = $0.50 per unit; $0.50 × (400 + 1,000 – 1,200) 2. Absorption costing income statements: 2008 2009 Revenues ($3 per unit) Cost of goods sold: Beginning inventory Variable manufacturing costs Fixed manufacturing costs * Cost of goods available for sale
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