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A1 fx Chapter 6: Ap Chapter 6: Applying Excel 3 Data 4 Selling price per unit 5 Manufacturing costs 6 Variable per unit produced $50 7 Direct materials $11 $6 $3 Direct labor Variable manufacturing overhead 10 Fixed manufacturing overhead per year 11 Selling and administrative expenses 12 Variable per unit sold 13 Fixed per year $120,000 $4 $70.000 14 15 Year 1 Year 2 16 Units in beginning inventory 17 Units produced during the year 18 Units sold during the year 10,000 8,000 6,000 6,000 19 20 Enter a formula into each of the cells marked with a ? below 21 Review Problem 1: Contrasting Variable and Absorption Costing 22 23 Compute the Ending Inventory 24 Year 1 Year 2 25 Units in beginning inventory 26 Units produced during the year 27 Units sold during the year 28 Units in ending inventory 29 2,000 10,000 8,000 6,000 6,000 2,000 2,000 30 Compute the Absorption Costing Unit Product Cost Year 1 31 Year 2 32 Direct materials 33 Direct labor 34 Variable manufacturing overhead 35 Fixed manufacturing overhead 36 Absorption costing unit product cost $11 $11 6 3 3 12 $32 20 $40 37 38 Construet the Absorption Costing Income Statement 39 Year 2 $ 400,000 $ 300,000 240.000 60,000 Year 1 40 Sales 41 Cost of goods sold 42 Gross margin 43 Selling and administrative expenses 44 Net operating income 45 256.000 144.000 102.000 $ 42,000 $ 34.000) 94.000 46 Compute the Variable Costing Unit Product Cost Year 1 $11 Year 2 $11 47 48 Direct materials 49 Direct labor 50 Variable manufacturing overhead 51 Variable costing unit product cost 52 3 $20 3 $20 53 Construct the Variable Costing income Statement 54 Year 1 Year 2 55 Sales 56 Variable expenses 57 Variable cost of goods sold 58 Variable selling and administrative expenses 59 Contribution margin 60 Fixed expenses 61 Fixed manufacturing overhead 62 Fixed selling and administrative expenses 63 Net operating income $ 400,000 $ 300,000 $ 160,000 32.000 $120,000 24,000 192,000 $144.000 156,000 208.000 $120,000 $120,000 $70.000 $190.000 $70.000 $18.000 $ (34.000) 2. Change all of the numbers in the data area of your worksheet so that it loo A B 1 Chapter 6: Applying Excel 3 Data Selling price per unit Manufacturing costs: 4 352 6. Variable per unit produced: Direct materials 151 8. Direct labor 53 9 Variable manufacturing overhead 24 10 Fixed manufacturing overhead per year 96,000 11 Selling and administrative expenses: 12 Variable per unit sold 13 Fixed per year 57,000 14 15 Year 1 Year 2 16 Units in beginning inventory 17 Units produced during the year 18 Units sold during the year 2,400 2,000 2,100 2,100

A1 fx Chapter 6: Ap Chapter 6: Applying Excel 3 Data 4 Selling price per unit 5 Manufacturing costs 6 Variable per unit produced $50 7 Direct materials $11 $6 $3 Direct labor Variable manufacturing overhead 10 Fixed manufacturing overhead per year 11 Selling and administrative expenses 12 Variable per unit sold 13 Fixed per year $120,000 $4 $70.000 14 15 Year 1 Year 2 16 Units in beginning inventory 17 Units produced during the year 18 Units sold during the year 10,000 8,000 6,000 6,000 19 20 Enter a formula into each of the cells marked with a ? below 21 Review Problem 1: Contrasting Variable and Absorption Costing 22 23 Compute the Ending Inventory 24 Year 1 Year 2 25 Units in beginning inventory 26 Units produced during the year 27 Units sold during the year 28 Units in ending inventory 29 2,000 10,000 8,000 6,000 6,000 2,000 2,000 30 Compute the Absorption Costing Unit Product Cost Year 1 31 Year 2 32 Direct materials 33 Direct labor 34 Variable manufacturing overhead 35 Fixed manufacturing overhead 36 Absorption costing unit product cost $11 $11 6 3 3 12 $32 20 $40 37 38 Construet the Absorption Costing Income Statement 39 Year 2 $ 400,000 $ 300,000 240.000 60,000 Year 1 40 Sales 41 Cost of goods sold 42 Gross margin 43 Selling and administrative expenses 44 Net operating income 45 256.000 144.000 102.000 $ 42,000 $ 34.000) 94.000 46 Compute the Variable Costing Unit Product Cost Year 1 $11 Year 2 $11 47 48 Direct materials 49 Direct labor 50 Variable manufacturing overhead 51 Variable costing unit product cost 52 3 $20 3 $20 53 Construct the Variable Costing income Statement 54 Year 1 Year 2 55 Sales 56 Variable expenses 57 Variable cost of goods sold 58 Variable selling and administrative expenses 59 Contribution margin 60 Fixed expenses 61 Fixed manufacturing overhead 62 Fixed selling and administrative expenses 63 Net operating income $ 400,000 $ 300,000 $ 160,000 32.000 $120,000 24,000 192,000 $144.000 156,000 208.000 $120,000 $120,000 $70.000 $190.000 $70.000 $18.000 $ (34.000) 2. Change all of the numbers in the data area of your worksheet so that it loo A B 1 Chapter 6: Applying Excel 3 Data Selling price per unit Manufacturing costs: 4 352 6. Variable per unit produced: Direct materials 151 8. Direct labor 53 9 Variable manufacturing overhead 24 10 Fixed manufacturing overhead per year 96,000 11 Selling and administrative expenses: 12 Variable per unit sold 13 Fixed per year 57,000 14 15 Year 1 Year 2 16 Units in beginning inventory 17 Units produced during the year 18 Units sold during the year 2,400 2,000 2,100 2,100

Financial & Managerial Accounting
Financial & Managerial Accounting
13th Edition
ISBN:9781285866307
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter27: Lean Principles, Lean Accounting, And Activity Analysis
Section: Chapter Questions
Problem 27.20EX
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Please help me with 2d, 2e, and 3b. Thanks! :)

A1 fx Chapter 6: Ap B D E Chapter 6: Applying Excel 3 Data 4 Selling price per unit 5 Manufacturing costs: 6 Variable per unit produced: Direct materials $50 7 $11 8 Direct labor $6 $3 Variable manufacturing overhead 10 Fixed manufacturing overhead per year 11 Selling and administrative expenses: 12 Variable per unit sold 13 Fixed per year 9 $120.000 $4 S70,000 14 15 Year 1 Year 2 16 Units in beginning inventory 17 Units produced during the year 18 Units sold during the year 10,000 6.000 8,000 6,000 19 20 Enter a formula into each of the cells marked with a ? below 21 Review Problem 1: Contrasting Variable and Absorption Costing 22 23 Compute the Ending inventory 24 Year 1 Year 2 25 Units in beginning inventory 26 Units produced during the year 27 Units sold during the year 28 Units in ending inventory 2,000 6,000 6,000 10,000 8.000 2,000 2,000 29 30 Compute the Absorption Costing Unit Product Cost Year 1 $11 31 Year 2 $11 32 Direct materials 33 Direct labor 34 Variable manufacturing overhead 35 Fixed manufacturing overhead 36 Absorption costing unit product cost 6 3 3 12 20 $32 $40 37 38 Construct the Absorption Costing Income Statement 39 Year 1 Year 2 40 Sales $ 400,000 S 300,000 41 Cost of goods sold 42 Gross margin 43 Selling and administrative expenses 44 Net operating income 256,000 240,000 144,000 102.000 $ 42,000 $ (34,000) 60,000 94.000 45 46 Compute the Variable Costing Unit Product Cost Year 1 Year 2 $11 47 48 Direct materials $11 6 49 Direct labor 6. 50 Variable manufacturing overhead 51 Variable costing unit product cost 3 $20 3 $20 52 53 Construct the Variable Costing income Statement 54 Year 1 Year 2 $ 400,000 $ 300,000 55 Sales 56 Variable expenses 57 Variable cost of goods sold 58 Variable selling and administrative expenses 59 Contribution margin 60 Fixed expenses 61 Fixed manufacturing overhead 62 Fixed selling and administrative expenses 63 Net operating income $ 160,000 192,000 208,000 $120,000 24,000 $144,000 156,000 32,000 $120,000 S70,000 $190,000 $ 18.000 $120,000 $70,000 $190,000 S (34.000) 2. Change all of the numbers in the data area of your worksheet so that it looks like this: A B Chapter 6: Applying Excel 2 3 Data 4 Selling price per unit 5 Manufacturing costs: 352 6 Variable per unit produced: 7 Direct materials 151 8 Direct labor 53 9 Variable manufacturing overhead 24 10 Fixed manufacturing overhead per year 96,000 11 Selling and administrative expenses: 12 Variable per unit sold 8 13 Fixed per year 57,000 14 15 Year 1 Year 2 16 Units in beginning inventory 17 Units produced during the year 2,400 2,000 18 Units sold during the year 2,100 2,100
Transcribed Image Text:A1 fx Chapter 6: Ap B D E Chapter 6: Applying Excel 3 Data 4 Selling price per unit 5 Manufacturing costs: 6 Variable per unit produced: Direct materials $50 7 $11 8 Direct labor $6 $3 Variable manufacturing overhead 10 Fixed manufacturing overhead per year 11 Selling and administrative expenses: 12 Variable per unit sold 13 Fixed per year 9 $120.000 $4 S70,000 14 15 Year 1 Year 2 16 Units in beginning inventory 17 Units produced during the year 18 Units sold during the year 10,000 6.000 8,000 6,000 19 20 Enter a formula into each of the cells marked with a ? below 21 Review Problem 1: Contrasting Variable and Absorption Costing 22 23 Compute the Ending inventory 24 Year 1 Year 2 25 Units in beginning inventory 26 Units produced during the year 27 Units sold during the year 28 Units in ending inventory 2,000 6,000 6,000 10,000 8.000 2,000 2,000 29 30 Compute the Absorption Costing Unit Product Cost Year 1 $11 31 Year 2 $11 32 Direct materials 33 Direct labor 34 Variable manufacturing overhead 35 Fixed manufacturing overhead 36 Absorption costing unit product cost 6 3 3 12 20 $32 $40 37 38 Construct the Absorption Costing Income Statement 39 Year 1 Year 2 40 Sales $ 400,000 S 300,000 41 Cost of goods sold 42 Gross margin 43 Selling and administrative expenses 44 Net operating income 256,000 240,000 144,000 102.000 $ 42,000 $ (34,000) 60,000 94.000 45 46 Compute the Variable Costing Unit Product Cost Year 1 Year 2 $11 47 48 Direct materials $11 6 49 Direct labor 6. 50 Variable manufacturing overhead 51 Variable costing unit product cost 3 $20 3 $20 52 53 Construct the Variable Costing income Statement 54 Year 1 Year 2 $ 400,000 $ 300,000 55 Sales 56 Variable expenses 57 Variable cost of goods sold 58 Variable selling and administrative expenses 59 Contribution margin 60 Fixed expenses 61 Fixed manufacturing overhead 62 Fixed selling and administrative expenses 63 Net operating income $ 160,000 192,000 208,000 $120,000 24,000 $144,000 156,000 32,000 $120,000 S70,000 $190,000 $ 18.000 $120,000 $70,000 $190,000 S (34.000) 2. Change all of the numbers in the data area of your worksheet so that it looks like this: A B Chapter 6: Applying Excel 2 3 Data 4 Selling price per unit 5 Manufacturing costs: 352 6 Variable per unit produced: 7 Direct materials 151 8 Direct labor 53 9 Variable manufacturing overhead 24 10 Fixed manufacturing overhead per year 96,000 11 Selling and administrative expenses: 12 Variable per unit sold 8 13 Fixed per year 57,000 14 15 Year 1 Year 2 16 Units in beginning inventory 17 Units produced during the year 2,400 2,000 18 Units sold during the year 2,100 2,100
If your formulas are correct, you should get the correct answers to the following questions. (a) What is the net operating income (loss) in Year 1 under absorption costing? (b) What is the net operating income (loss) in Year 2 under absorption costing? (c) What is the net operating income (loss) in Year 1 under variable costing? (d) What is the net operating income (loss) in Year 2 under variable costing? (e) The net operating income (loss) under absorption costing is less than the net operating income (loss) under variable costing in Year 2 because: (You may select more than one answer. Single click the box with the question mark to produce a check mark for a ? Units were left over from the previous year. The cost of goods sold is always less under variable costing than under absorption costing. Sales exceeded production so some of the fixed manufacturing overhead of the perlod was released from inventories under absorption costing. 3. Make a note of the absorption costing net operating income (loss) in Year 2 At the end of Year 1, the company's board of directors set a target for Year 2 of net operating income of $130,000 under absorption costing. If this target is met, a hefty bonus would be paid to the CEO of the company. Keeping everything else the same from part (2) above, change the units produced in Year 2 to 4,000 units. (a) Would this change result in a bonus being paid to the CEO? O Yes O No (b) What is the net operating income (loss) in Year 2 under absorption costing? (c) Would this doubling of production in Year 2 be in the best interests of the company if sales are expected to continue to be 2,100 units per year? O Yes O No
Transcribed Image Text:If your formulas are correct, you should get the correct answers to the following questions. (a) What is the net operating income (loss) in Year 1 under absorption costing? (b) What is the net operating income (loss) in Year 2 under absorption costing? (c) What is the net operating income (loss) in Year 1 under variable costing? (d) What is the net operating income (loss) in Year 2 under variable costing? (e) The net operating income (loss) under absorption costing is less than the net operating income (loss) under variable costing in Year 2 because: (You may select more than one answer. Single click the box with the question mark to produce a check mark for a ? Units were left over from the previous year. The cost of goods sold is always less under variable costing than under absorption costing. Sales exceeded production so some of the fixed manufacturing overhead of the perlod was released from inventories under absorption costing. 3. Make a note of the absorption costing net operating income (loss) in Year 2 At the end of Year 1, the company's board of directors set a target for Year 2 of net operating income of $130,000 under absorption costing. If this target is met, a hefty bonus would be paid to the CEO of the company. Keeping everything else the same from part (2) above, change the units produced in Year 2 to 4,000 units. (a) Would this change result in a bonus being paid to the CEO? O Yes O No (b) What is the net operating income (loss) in Year 2 under absorption costing? (c) Would this doubling of production in Year 2 be in the best interests of the company if sales are expected to continue to be 2,100 units per year? O Yes O No
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