6. Irish Company manufactures sleeping bags that sell for P30 each. The variable standard costs of production are P19.50. Budgeted fixed manufacturing overhead is P100,000, and budgeted production is 10,000 sleeping bags. The company actually manufactured 12,500 bags, of which 11,000 were sold. There were no variances during the year except for the fixed-overhead volume variance. Variable selling and administrative costs are PO.50 per sleeping bag sold; fixed selling and administrative costs are P5,000. Required: a. Calculate the standard product cost per sleeping bag under absorption costing and variable costing. b. Compute the fixed-overhead volume variance. c. Prepare income statements for the year by using absorption costing and variable costing.

6. Irish Company manufactures sleeping bags that sell for P30 each. The variable standard costs of production are P19.50. Budgeted fixed manufacturing overhead is P100,000, and budgeted production is 10,000 sleeping bags. The company actually manufactured 12,500 bags, of which 11,000 were sold. There were no variances during the year except for the fixed-overhead volume variance. Variable selling and administrative costs are PO.50 per sleeping bag sold; fixed selling and administrative costs are P5,000. Required: a. Calculate the standard product cost per sleeping bag under absorption costing and variable costing. b. Compute the fixed-overhead volume variance. c. Prepare income statements for the year by using absorption costing and variable costing.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter8: Standard Costs And Variances

Section: Chapter Questions

Problem 11EB: Fitzgerald Company manufactures sewing machines, and they produced 2,500 this past month. The...

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