# Cost of Goods Manufactured, using Variable Costing and Absorption CostingOn March 31, the end of the first month of operations, Barnard Inc. manufactured 15,000 units and sold 12,000 units. The following income statement was prepared, based on the variablecosting concept:Barnard Inc.Variable Costing Income StatementFor the Year Ended March 31, 20Y1Sales\$2,160,000Variable cost of goods sold:Variable cost of goods manufactured\$1,620,000Inventory, March 31(324,000)Total variable cost of goods sold(1,296,000)Manufacturing margin\$864,000Total variable selling and administrative expenses(96,000)Contribution margin\$768,000Fixed costs:Fixed manufacturing costs\$210,000Fixed selling and administrative expenses45,000Total fixed costs(255,000)\$513,000Operating incomeDetermine the unit cost of goods manufactured, based on (a) the variable costing concept and (b) the absorption costing concept.

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Step 1

Variable Costing:

Variable costing is a concept used in managerial and cost accounting in which the fixed manufactured overhead is excluded from the product while calculating cost of production.

Absorption Costing:

Absorption costing is a cost accounting method for valuing inventory. Absorption costing includes or “absorbs” all the costs of manufacturing a product.

Step 2

Following are the computation of uni...

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