3.1Fresh Products manufactures and sells a variety of camping products. Recently, thecompany opened a new plant to manufacture a deluxe portable cooking unit. Cost and salesdata for the first month of operations are shown below:Manufacturing CostsFixed overheadInsivni gnibno orfT asP 108,000 sdsinv gnimuAP 3 per unititaco sldaiusvP 12 per unit AP 30 per unit00,0nolevniVariable overheadDirect laborDirect materialBeginning inventoryUnits producedUnits soldanil Selling and administrative costs aid 1oi sidalieO units12,000 000.0E.b10,000nothaaniwolloi odTFixedVariableP 200,000bubonq lo sinu req P4 per unit sold aldsinaVIsunns laloTThe portable cooking unit sells for P110. Management is interested in the openinmonth's results and has asked for an income statement.Instructions:1. Assume the company uses absorption costing. Calculate the production cost per uand prepare an income statement for the month of June 2007.onovni gni2. Assume the company uses variable costing. Calculate the production cost per unit,prepare an income statement for the month of June 2007.3. Explain the amount by which absorption costing income would differ from variacosting income. (Compute difference without computing absorption costing income)

1. Production cost per unit = 10800012000+3+12+30=P54 Fresh Products Income Statement -…

3.1 Fresh Products manufactures and sells a variety of camping products. Recently, the company opened a new plant to manufacture a deluxe portable cooking unit. Cost and sales data for the first month of operations are shown below: Manufacturing Costs Fixed overhead Variable overhead int gnibo sfT as animuA sldav P 108,000 P 3 per unit P 12 per unit P 30 per unit O units 12,000 10,000 Direct labor Direct material Beginning inventory Units produced Units sold Selling and administrative costs Fixed Variable 0.0b aniwollot s nillse P 200,000 buboq lo sinu g P4 per unit sold The portable cooking unit sells for P110. Management is interested in the openin month's results and has asked for an income statement. Instructions: 1. Assume the company uses absorption costing. Calculate the production cost per u and prepare an income statement for the month of June 2007. 2. Assume the company uses variable costing. Calculate the production cost per unit, prepare an income statement for the month of June 2007. 3. Explain the amount by which absorption costing income would differ from varia costing income. (Compute difference without computing absorption costing income)

3.1 Fresh Products manufactures and sells a variety of camping products. Recently, the company opened a new plant to manufacture a deluxe portable cooking unit. Cost and sales data for the first month of operations are shown below: Manufacturing Costs Fixed overhead Variable overhead int gnibo sfT as animuA sldav P 108,000 P 3 per unit P 12 per unit P 30 per unit O units 12,000 10,000 Direct labor Direct material Beginning inventory Units produced Units sold Selling and administrative costs Fixed Variable 0.0b aniwollot s nillse P 200,000 buboq lo sinu g P4 per unit sold The portable cooking unit sells for P110. Management is interested in the openin month's results and has asked for an income statement. Instructions: 1. Assume the company uses absorption costing. Calculate the production cost per u and prepare an income statement for the month of June 2007. 2. Assume the company uses variable costing. Calculate the production cost per unit, prepare an income statement for the month of June 2007. 3. Explain the amount by which absorption costing income would differ from varia costing income. (Compute difference without computing absorption costing income)

Financial & Managerial Accounting

14th Edition

ISBN:9781337119207

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter18: Activity-Based Costing

Section: Chapter Questions

Problem 3ADM: Production run size and activity improvement Littlejohn, Inc. manufactures machined parts for the...

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