cost of goods sold

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Unformatted text preview: .............................. Cost of goods sold ............................................. Year 1 $ 572,000 195,000 $ 377,000 Year 2 $ 660,000 225,000 $ 435,000 (120,000) (163,800) $ 93,200 (120,000) (163,800) $ 151,200 $ $ 30,000 195,000 $225,000 0 $ 225,000 0 225,000 $ 225,000 30,000 $ 195,000 Firm performance has improved from Year 1 to Year 2. 3. Year 1 fixed overhead rate = $120,000/30,000 = $4.00 4. Absorption-costing inventory = ($7.50 + $4.00) × 4,000 = $46,000 Variable-costing inventory = $7.50 × 4,000 = $30,000 10–19 332 1. Ziemble Company Absorption-Costing Income Statement Sales ........................................................................................... Cost of goods sold* .................................................................. Gross margin ............................................................................. Selling and administrative expenses ...................................... Net income ........................................................................... $ 1,512,000 1,048,000 $ 464,000 444,000 $ 20,000 *Fixed overhead rate = $300,000/75,000 = $4 per unit Applied fixed overhead = $4 × 74,000 = $296,000 Underapplied fixed overhead = $300,000 – $296,000 = $4,000 Cost of goods sold = ($4 × 72,000) + $4,000 + $756,000 = $1,048,000 2. The difference is $8,000 ($20,000 – $12,000) and is due to the fixed overhead that would be attached to the ending inventory ($4 × 2,000 units). IA – IV = Fixed overhead rate(Production – Sales) $20,000 – $12,000 = $4(74,000 – 72,000) $8,000 = $8,000 333 10–20 1. Scented Sales $ 13,000 Less: Variable expenses 9,100 Contribution margin $ 3,900 Less: Direct fixed expenses 4,250 Product margin $ (350) Less: Common fixed expenses Net (loss) Musical $ 19,500 15,600 $ 3,900 5,750 $ (1,850) Regular $ 25,000 12,500 $ 12,500 3,000 $ 9,500 Total $ 57,500 37,200 $ 20,300 13,000 $ 7,300 7,500 $ (200) Kathy should accept this proposal. The 30 percent sales increase, coupled with the increased advertising, reduces the loss from $1,000 to $200....
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This document was uploaded on 11/26/2013.

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