110000 310000 Net operating income 20000 Exercise 6 19A 1 A and b Absorption

110000 310000 net operating income 20000 exercise 6

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110,000 310,000 Net operating income 20,000 Exercise 6-19A 1. A and b. Absorption costing Variable costing Direct materials $86 $86 Variable manufacturing overhead $4 $4 Fixed Manufacturing overhead 60 Unit product cost $150 $90 2. Absorption costing income statement Sales $800,000 Cost of Goods sold $480,000 Gross margin $320,000 Selling and administrative exp $280,000 Net operating income $40,000 3. Variable income statement Sales 800,000 Variable expenses: Variable cost of goods sold 288,000 Variable selling and administrative exp 120,000 408,000 Contribution Margin 392,000 Fixed Expenses: Fixed manufacturing overhead 240,000 Fixed selling and administrative 160,000 400,000 Net operating loss (8,000) Problem 6-21a 1. A. Absorption costing unit product cost Direct materials 1.00 Direct labor .80 Variable manufacturing overhead .20 Fixed manufacturing overhead 1.50 Absorption costing unit product cost 3.50 B. Absorption costing income statement Sales 200,000 Cost of goods sold 140,000 Gross margin 60,000 Selling and administrative expenses 50,000
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Net operating income 10,000 C. Reconcilation Variable costing net operating loss (5,000) Add fixed manufacturing overhead cost deferred 15,000 Absorption costing net operating income 10,000 3. a. variable costing income statement Sales 300,000 Variable expenses: Variable cost of goods sold 120,000 Variable selling and admin exp 45,000 165,000 Contribution Margin 135,000 Fixed expense Fixed manufacturing overhead 75,000 Fixed and selling admin expense 20,000 95,000 Net operating income 40,000 b. The absorption costing unit product cost will remain at 3.50 Sales 300,000 Cost of goods sold 210,000 Gross margin 90,000 Selling and administrative exp 65,000 Net operating income 25,000 c. reconciliation: Variable costing net operating income 40,000 Deduct fixed manufacturing overhead cost 15,000 Absorption costing net operating income 25,000
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  • Spring '12
  • janigrt
  • gross margin, unit product cost, total variable manufacturing

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