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DANIELS TOOL B: DIE CORPORATION 20152010 Comparative Income Statements Sales $333,333 Cost of goods sold Finished goods, January 1 24,?00 Cost of

General when the question has fewer numbers, I found easier to answer, but when different numbers from different departments are put on the question, it confuses me a lot, My question below is asking me to do variable cost, could you kindly explain in details when answering. Thanks you

The Daniels Tool & Die Corporation has been in existence for a little over three years. The company's sales have been increasing each year as it builds a reputation. The company manufactures dies to its customers' specifications and therefore uses a job-order cost system. Factory overhead is applied to the jobs based on direct labour hours—the absorption-costing (full) method. Overapplied or underapplied overhead is treated as an adjustment to Cost of Goods Sold. The company's income statements and other data for the last two years are as follows:



In 2015 and 2016, the actual direct labour hours used were 20,700 and 23,700, respectively. Raw materials put into production were $292,000 in 2015 and $370,900 in 2016. The actual fixed overhead was $42,100 for 2015 and $21,260 for 2016, and the planned direct labour rate was the direct labour achieved.

For both years, all of the administrative costs were fixed. The variable portion of the selling expenses results from a 5% commission that is paid as a percentage of the sales revenue.


2015—2010 Comparative Income Statements Sales $333,333
Cost of goods sold
Finished goods, January 1 24,?00
Cost of goods manufactured 54?,T00
Total available 53,400
Finished goods, December 31 1?,400
Cost of goods sold before overhead adjustment 555,000
Underapplied factory overhead 35,100
Cost of goods sold 590, 100
IGross profit 248,?00
Selling expenses 31,200
Administrative expenses 59,600
Total operating expenses 150,000 Operating income $91900 $1,315,333 13,433 650,300 Eff-8,100
13,?00 I55 4,400 14,333 (Sufi-8,400
34?,500 34,333
34,433 133,333


Daniels Iool E: Di orporation Inventory Balances Raw material $21,600 $29,000 $10,800
Work in process $40,300 $47,200 $63,800
Direct labour hours (used in WIP) 1,310 1,660 2,400
Finished goods $24,700 $17,400 $13,700
Direct labour hours (used in F6) 1,470 1,090 820 Daniels used the same predetermined overhead rate in applying overhead to its production orders in both 2015 and 2016. The rate was based on the following estimates: Fixed factory overhead $24,540
Variable factory overhead $152,148
Direct labour hours (used in WIP) 24,540 Direct labour costs (used in F6) $147,240

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