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During the most recent year, Lonely Company had the following data associated with the product it makes: Units in beginning inventory Units produced Units sold (P300 per unit) Variable costs per unit: Direct Materials Direct labor Variable overhead Fixed Costs Fixed overhead per unit produced Fixed selling and administrative expense Required: 8,000 P 100 P 50 P 25 10,000 P 50 P100,000 1. Prepare income statement using Variable costing 2. How many units in ending inventory? 3. Using the absorption costing, compute the product cost per unit.

During the most recent year, Lonely Company had the following data associated with the product it makes: Units in beginning inventory Units produced Units sold (P300 per unit) Variable costs per unit: Direct Materials Direct labor Variable overhead Fixed Costs Fixed overhead per unit produced Fixed selling and administrative expense Required: 8,000 P 100 P 50 P 25 10,000 P 50 P100,000 1. Prepare income statement using Variable costing 2. How many units in ending inventory? 3. Using the absorption costing, compute the product cost per unit.

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter7: Variable Costing For Management analysis
Section: Chapter Questions
Problem 3BE: Variable costingsales exceed production The beginning inventory is 52,800 units. All of the units...
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Direction: Show computations During the most recent year, Lonely Company had the following data associated with the product it makes: Units in beginning inventory Units produced Units sold (P300 per unit) Variable costs per unit: Direct Materials Direct labor Variable overhead Fixed Costs Fixed overhead per unit produced Fixed selling and administrative expense Required: 8,000 P 100 P 50 P 25 10,000 P 50 P100,000 1. Prepare income statement using Variable costing 2. How many units in ending inventory? 3. Using the absorption costing, compute the product cost per unit. 4. Using the Variable costing, compute the product cost per unit. 5. What is the value of ending inventory under Variable costing? 6. What is the value of ending inventory under Absorption costing? Compute the net income under Absorption costing. 7.
Transcribed Image Text:Direction: Show computations During the most recent year, Lonely Company had the following data associated with the product it makes: Units in beginning inventory Units produced Units sold (P300 per unit) Variable costs per unit: Direct Materials Direct labor Variable overhead Fixed Costs Fixed overhead per unit produced Fixed selling and administrative expense Required: 8,000 P 100 P 50 P 25 10,000 P 50 P100,000 1. Prepare income statement using Variable costing 2. How many units in ending inventory? 3. Using the absorption costing, compute the product cost per unit. 4. Using the Variable costing, compute the product cost per unit. 5. What is the value of ending inventory under Variable costing? 6. What is the value of ending inventory under Absorption costing? Compute the net income under Absorption costing. 7.
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