2. A manufacturing company called Kelly Ltd. produces a single product with a selling price of $65 per unit, the following data regarding it's operation in the recent years is available : Units in Beginning Inventory in Year 1 O units Units produced in Year I 18,000 units Units sold in Year I 15.500 units Units produced in Year 2 15.000 units Units sold in Year 2 17,000 units Page 2 of 5 Variable costs of the company during Year I operations: DM $25 DL SI1.50 мон $2.75 Selling & Admin S7.70 Variable costs of the company during Year 2 operations: DM $25.75 DL. s12 мон $3.5 Selling & Admin S8 Fixed costs of the company during Year I and Year 2 operations : 3/5 Selling & Admin expenses S70,000 Manufacturing Overheads $200,000 Required: a Calculate the product cost per unit for Year Il and Year 2, under the Variable Costing System. b. Calculate the product cost per unit for Year I and Year 2, under the Absorption Costing System. c. Prepare the Income Statements for Year 2 only, using the variable costing system.
2. A manufacturing company called Kelly Ltd. produces a single product with a selling price of $65 per unit, the following data regarding it's operation in the recent years is available : Units in Beginning Inventory in Year 1 O units Units produced in Year I 18,000 units Units sold in Year I 15.500 units Units produced in Year 2 15.000 units Units sold in Year 2 17,000 units Page 2 of 5 Variable costs of the company during Year I operations: DM $25 DL SI1.50 мон $2.75 Selling & Admin S7.70 Variable costs of the company during Year 2 operations: DM $25.75 DL. s12 мон $3.5 Selling & Admin S8 Fixed costs of the company during Year I and Year 2 operations : 3/5 Selling & Admin expenses S70,000 Manufacturing Overheads $200,000 Required: a Calculate the product cost per unit for Year Il and Year 2, under the Variable Costing System. b. Calculate the product cost per unit for Year I and Year 2, under the Absorption Costing System. c. Prepare the Income Statements for Year 2 only, using the variable costing system.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter18: Pricing And Profitability Analysis
Section: Chapter Questions
Problem 28P: The following information pertains to Vladamir, Inc., for last year: There are no work-in-process...
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Transcribed Image Text:2. A manufacturing company called Kelly Lid. produces a single product with a selling price of $65
per unit, the following data regarding it's operation in the recent years is available :
Units in Beginning Inventory in Year I
O units
Units produced in Year 1
18,000 units
Units sold in Year 1
15.500 units
Units produced in Year 2
15,000 units
Units sold in Year 2
17,000 units
Page 2 of 5
Variable costs of the company during Year I operations:
DM
$25
SI1.50
$2.75
DL
мон
Selling & Admin
$7.70
Variable costs of the company during Year 2 operations :
DM
$25.75
$12
$3.5
DI.
мон
Selling & Admin
$8
Fixed costs of the company during Year I and Year 2 operations :
3/5
Selling & Admin expenses
S70,000
Manufacturing Overheads
s200,000
Required:
a. Caleulate the product cost per unit for Year I and Year 2, under the Variable Costing System.
b. Calculate the product cost per unit for Year 1I and Year 2, under the Absorption Costing System.
c. Prepare the Income Statements for Year 2 only , using the variable costing system.
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