also access the production plant. Sales Direct materials Direct Labor G&A nough raw materials to produce during this month, and as the Our CEO has decided to continue with production, even though we will not be able to sell and deliver until month 3. EBIT Please explain in detail which of the cost lines are product cost and which are period cost. Show a forecast of the Income statement for month 2 considering the same level of production as month 1. Manufacturing Overhead Depreciation Utilities Maintenance Gross Margin % GM Month 1 20.000 10.000 3.000 2.000 5.000 25% 700 4.300 400 900 700

Financial And Managerial Accounting
15th Edition
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:WARREN, Carl S.
Chapter18: Activity-based Costing
Section: Chapter Questions
Problem 3CMA: Young Company is beginning operations and is considering three alternatives to allocate...
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Find below an income statement of company Vieta Corp

The data that it shows is related to the month 1. We are about to start the second month, but there is a big snowstorm that is blocking the transportation.

 

 

 

We do have enough raw materials to produce during this month, and as the workers live nearby, they can
also access the production plant.
Our CEO has decided to continue with production, even though we will not be able to sell and deliver until
month 3.
Please explain in detail which of the cost lines are product cost and which are period cost.
Show a forecast of the Income statement for month 2 considering the same level of production as
month 1.
Sales
Direct materials
Direct Labor
G&A
EBIT
Manufacturing Overhead
Depreciation
Utilities
Maintenance
Gross Margin
% GM
Month 1
20.000
10.000
3.000
2.000
5.000
25%
700
4.300
400
900
700
W
K
b
O
Л
<
1
W
L
Б
[
command
Transcribed Image Text:We do have enough raw materials to produce during this month, and as the workers live nearby, they can also access the production plant. Our CEO has decided to continue with production, even though we will not be able to sell and deliver until month 3. Please explain in detail which of the cost lines are product cost and which are period cost. Show a forecast of the Income statement for month 2 considering the same level of production as month 1. Sales Direct materials Direct Labor G&A EBIT Manufacturing Overhead Depreciation Utilities Maintenance Gross Margin % GM Month 1 20.000 10.000 3.000 2.000 5.000 25% 700 4.300 400 900 700 W K b O Л < 1 W L Б [ command
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