Nato Company was organized a year ago. The results of the company's first year of operations using the absorption costing method follow: Sales (40,000 units @P33.75), P 1,350,000; Cost of goods manufactured (50,000 units @ 21), p 1,050,000; Ending inventory (10,000 units @ 21), P_210,000; Selling & administrative expenses, P420,000; Net Operating income, P90,000. The company's selling and administrative expenses consists of P300,000 per year in fixed expenses and P3.00 per unit sold in variable expenses. The product cost of P21 is computed as follows: Direct materials - P10.00; Direct labor - P4.00; Variable manufacturing overhead - P2.00; Fixed manufacturing overhead (P250,000/50,000 units) –P5.00. Compute for the operating income under variable costing.
Nato Company was organized a year ago. The results of the company's first year of operations using the absorption costing method follow: Sales (40,000 units @P33.75), P 1,350,000; Cost of goods manufactured (50,000 units @ 21), p 1,050,000; Ending inventory (10,000 units @ 21), P_210,000; Selling & administrative expenses, P420,000; Net Operating income, P90,000. The company's selling and administrative expenses consists of P300,000 per year in fixed expenses and P3.00 per unit sold in variable expenses. The product cost of P21 is computed as follows: Direct materials - P10.00; Direct labor - P4.00; Variable manufacturing overhead - P2.00; Fixed manufacturing overhead (P250,000/50,000 units) –P5.00. Compute for the operating income under variable costing.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter2: Basic Cost Management Concepts
Section: Chapter Questions
Problem 25E: Last year, Orsen Company produced 25,000 juicers and sold 26,500 juicers for 60 each. The actual...
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Nato Company was organized a year ago. The results of the company's first year of operations using the absorption costing method follow: Sales (40,000 units @P33.75), P 1,350,000; Cost of goods manufactured (50,000 units @ 21), p 1,050,000; Ending inventory (10,000 units @ 21), P_210,000; Selling & administrative expenses, P420,000; Net Operating income, P90,000. The company's selling and administrative expenses consists of P300,000 per year in fixed expenses and P3.00 per unit sold in variable expenses. The product cost of P21 is computed as follows: Direct materials - P10.00; Direct labor - P4.00; Variable manufacturing
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