Consider the following situation for Junkee Corporation for the prior year. The company produced 1,000 units and sold 900 units, both as budgeted. There were no beginning or ending work-in-process inventories and no beginning finished goods inventory. Budgeted per unit revenues and costs were as follows. Per Unit Sales price P 100 Direct Materials 30 Direct Labor 20 Variable Manufacturing Overhead 10 Fixed Manufacturing Overhead 5 Variable Selling Costs 12 Fixed Selling Costs (Total P3,600) 4 Fixed Administrative Costs (Total P 1,800) 2 Required: 1. Using absorption costing, compute the product cost, Ending inventory, Cost of Sale, & Net Income. 2. Using variable costing, compute the product cost, Ending inventory, Cost of Sale, & Net Income. 3. Reconcile the two computed net income under the two difference product costing techniques.
Consider the following situation for Junkee Corporation for the prior year. The company produced 1,000 units and sold 900 units, both as budgeted. There were no beginning or ending work-in-process inventories and no beginning finished goods inventory. Budgeted per unit revenues and costs were as follows. Per Unit Sales price P 100 Direct Materials 30 Direct Labor 20 Variable Manufacturing Overhead 10 Fixed Manufacturing Overhead 5 Variable Selling Costs 12 Fixed Selling Costs (Total P3,600) 4 Fixed Administrative Costs (Total P 1,800) 2 Required: 1. Using absorption costing, compute the product cost, Ending inventory, Cost of Sale, & Net Income. 2. Using variable costing, compute the product cost, Ending inventory, Cost of Sale, & Net Income. 3. Reconcile the two computed net income under the two difference product costing techniques.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter8: Budgeting For Planning And Control
Section: Chapter Questions
Problem 13CE: Nashler Company has the following budgeted variable costs per unit produced: Budgeted fixed overhead...
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Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Consider the following situation for Junkee Corporation for the prior year.
The company produced 1,000 units and sold 900 units, both as budgeted.
There were no beginning or ending work-in-process inventories and no beginning finished goods inventory.
Budgeted per unit revenues and costs were as follows.
Per Unit
Sales price P 100
Direct Materials 30
Direct Labor 20
Variable Manufacturing Overhead 10
Fixed Manufacturing Overhead 5
Variable Selling Costs 12
Fixed Selling Costs (Total P3,600) 4
Fixed Administrative Costs (Total P 1,800) 2
Required:
1. Using absorption costing, compute the product cost, Ending inventory, Cost of Sale, & Net Income.
2. Using variable costing, compute the product cost, Ending inventory, Cost of Sale, & Net Income.
3. Reconcile the two computed net income under the two difference product costing techniques.
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