A company had net income of $60,000 on their direct (variable) costing Income Statement for a given period. Beginning inventories for that period were 13,000 units and ending inventories were 21,000 units. The company makes 4 units per hour. The Production Volume Variance or Denominator Volume Variance was 0. If the fixed overhead application rate was $8.00 per HOUR for all periods involved, what was the net income using absorption costing? $68,000 O $76,000 O $44,000 O $124,000

A company had net income of $60,000 on their direct (variable) costing Income Statement for a given period. Beginning inventories for that period were 13,000 units and ending inventories were 21,000 units. The company makes 4 units per hour. The Production Volume Variance or Denominator Volume Variance was 0. If the fixed overhead application rate was $8.00 per HOUR for all periods involved, what was the net income using absorption costing? $68,000 O $76,000 O $44,000 O $124,000

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Description: Question 10Question #10 is independent of the previous questions.A company had net income of $60,000 on their direct (variable) costing Income Statement for agiven period.Beginning inventories for that period were 13,000 units and ending inventories

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter8: Standard Cost Accounting—materials, Labor, And Factory Overhead

Section: Chapter Questions

Problem 20E: Calculating amount of factory overhead applied to work in process The overhead application rate for...

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Appendix Absorption costing income statement On June 30, the end of the first month of operations, Tudor Manufacturing Co. prepared the following income statement, based on the variable existing concept: Sales (420,000 units) 7,450,000 Variable cost of goods sold: Variable cost of goods manufactured (500,000 units x 14 per unit) 7,000,000 Less ending inventory (80,000 units x 14 per unit) 1,120,000 Variable cost of goods sold 5,880,000 Manufacturing margin 1,570,000 Variable selling and administrative expenses 80,000 Contribution margin 1,490,000 Fixed costs: Fixed manufacturing costs 160,000 Fixed selling and administrative expenses 75,000 235,000 Income from operations 1,255,000 a. Prepare an absorption costing income statement. b. Reconcile the variable costing income from operations of 1,255,000 with the absorption costing income from operations determined in (a).
Calculating amount of factory overhead applied to work in process The overhead application rate for a company is 2.50 per unit, made up of 1.00 for fixed overhead and 1.50 for variable overhead. Normal capacity is 10,000 units. In one month, there was an unfavorable flexible budget variance of 200. Actual overhead for the month was 27,000. What was the amount of the budgeted overhead for the actual level of production?
Refer to Cornerstone Exercise 9.1. Guillermos Oil and Lube Company provided the following information for the production of oil changes during the month of June: Actual number of oil changes performed: 980 Actual number of direct labor hours worked: 386 hours Actual rate paid per direct labor hour: 14.50 Standard rate per direct labor hour: 14.00 Required: 1. Calculate the direct labor rate variance (LRV) and the direct labor efficiency variance (LEV) for June using the formula approach. 2. Calculate the direct labor rate variance (LRV) and the direct labor efficiency variance (LEV) for June using the graphical approach. 3. Calculate the total direct labor variance for oil changes for June. 4. What if the actual wage rate paid in June was 12.40? What impact would that have had on the direct labor rate variance (LRV)? On the direct labor efficiency variance (LEV)?
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