Units in beginning inventory 0 Units produced 275 Units sold 260 Units in

Units in beginning inventory 0 units produced 275

This preview shows page 3 - 6 out of 10 pages.

Units in beginning inventory 0 Units produced 275 Units sold 260 Units in ending inventory 15 Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs: Fixed manufacturing overhead 77,000 Fixed selling and administrative 33,000 The absorption costing income statement prepared by the company’s accountant for last year appears below: Sales 239,200 Cost of goods sold 195,000 Gross margin 44,200 Selling and administrative expense 36,900 Net operating income 7,300 Determine how much of the ending inventory consists of fixed manufacturing overhead cost deferred in inventory to the next period. Total fixed manufacturing overhead in ending inventory 77,000/275=280
Image of page 3
2 Prepare an income statement for the year using variable costing. Ida Sidha Karya Company Variable Costing Income Statement Sales $239,200 Variable Expenses: $122,200 3,900 126,100 Contribution Margin 113,100 Fixed Expenses: Fixed Manufacturing Overheadd 77,000 Fixed selling and administrative 33,000 110,000 Net Operating Income $3,100 Variable Cost of goods sold ((110+320+40) X 260) Variabl selling and administrative expenses (15 X 260)
Image of page 4
Problem 6-19 Variable Costing Income Statement; Reconciliation [LO6-2, LO6-3] Year 1 Year 2 $ $ $ $ * $3 per unit variable; $253,000 fixed each year. The company’s $34 unit product cost is computed as follows: $ $ Production and cost data for the two years are: Year 1 Year 2 21,000 21,000 16,000 26,000 Required: 1 Prepare a variable costing contribution format income statement for each year. Ida Sidha Karya Company Variable Costing Income Statement Year 1 Year 2 During Heaton Company’s first two years of operations, the company reported absorption costing net operating income as follows: Sales (@ $63 per unit) 1,008,000 1,638,000 Cost of goods sold (@ $34 per unit) 544,000 884,000 Gross margin 464,000 754,000 Selling and administrative expenses* 301,000 331,000 Net operating income 163,000 423,000 Direct materials 6 Direct labor 12
Image of page 5
Image of page 6

You've reached the end of your free preview.

Want to read all 10 pages?

  • Spring '16
  • unit product cost, Sidha Karya Company, Fixed Manufacturing Overheadd

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture