Direct materials 18 Direct Labor 7 Variable Manufacturing Overhead 2 Total

Direct materials 18 direct labor 7 variable

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Direct materials $18 Direct Labor 7 Variable Manufacturing Overhead 2 Total Variable Manufacturing costs 27 Fixed Manufacturing overhead 10 Absorption costing unit product cost 37 b. The absorption costing income statement: Sales 800,000 Cost of goods sold 592,000 Gross margin 208,000 Selling and admin exp 142,000 Net operating income 66,000 2. A. The unit product cost under variable costing Direct materials $18 Direct labor $7 Variable manufacturing overhead $2 Variable costing unit product cost $27 B. The variable costing Income statement Sales $800,000 Less variable expense: Variable cost of goods sold 432,000 Variable selling expense 32,000 464,000 Contribution Margin 336,000 Less fixed Expenses: Fixed manufacturing overhead 200,000 Fixed selling & admin 110,000 310,000 Net operating income 26,000 3. The absorption costing income statement Sales 765,000 Cost of Goods sold 555,000 Gross margin 210,000 Selling and admin exp 140,000 Net operating income 70,000 The variable costing income statement Sales 765,000
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Less variable expenses Variable cost of goods sold 405,000 Variable selling expense 30,000 435,000 Contribution Margin 330,000 Less fixed expenses Fixed manufacturing overhead 200,000 Fixed selling and admin
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  • Spring '12
  • janigrt
  • gross margin, unit product cost, total variable manufacturing

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