Net income under Variable costing Method
Q: Explain the difference between total variable costs and variable costs per unit.
A: Cost can be categorized as variable and fixed costs.
Q: Questions: a. What is the net income under variable costing method? b. What is the net income…
A: The question is based on the concept of Cost Accounting.
Q: TRUE OR FALSE The use of absorption costing facilitates contribution margin approach in preparing…
A: Performa of income statement under absorption costing Particulars Amount Sales - Less :…
Q: Variable Costing Income Statement
A: Particulars in millions Total (A) Fixed (B) Variable (C = A - B) Cost of goods sold $18240…
Q: Cost-volume-profit analysis favors either variable costing or absorption costs. Why?
A: The CVP analysis is used to analyse the impact of changes in variable cost and fixed cost on net…
Q: The contribution-margin format is used for A. variable costing income statement O B. job order…
A: The contribution margin the amount of profit earned after considering any the variable expenses.
Q: unit product cost under variable costing
A: Variable costing only takes into account the variable costs to compute the total cost.
Q: What is the amount of the difference between the variable costing and absorption costing net…
A: Sales 3,311,000 Variable costs Direct Materials 1,161,000…
Q: Solve operating income using absorption costing.
A:
Q: ement applicable to service operations? If so, provide a hypothetical example of variable costing…
A: Variable costing income statement Variable costing income statement is one where all variable…
Q: What is the effect of an increase in activity on total variable costs,variable cost per unit of…
A: Total cost refers to the cost or amount incurred by the company in production of its goods and…
Q: Show income comparison's of absorption and variable costing?
A: Absorption costing method can be defined as the all the costs that is associated with the production…
Q: When units produced exceed units sold, how does operating income differ between variable costing and…
A: Absorption costing: Absorption costing is compulsory under Generally Accepted Accounting…
Q: Explain why there is a difference in the operating profit and operating income under the two methods…
A: The product cost in an absorption costing method includes all variable and fixed production…
Q: Which of the following cost is not considered as period cost under marginal costing? Variable…
A: Marginal Costing: Marginal Costing is a costing technique whereby variable cost are charged to cost…
Q: A. Compute net income under i. Absorption Costing $ ii. Variable Costing
A: The variable costing method and absorption costing are two methods of costing to find the cost of…
Q: ow do I prepare an income statement based on variable co
A: In managerial accounting, variable costing is a cost concept. During the creation of a product…
Q: use in Excel. Proposed Range Name Price_per_Unit Cost per Unit ProfitS_per_Unit Fixed Costs…
A: Answer: The answer for question is given below: A B 1 Price per Unit Price_per_Unit 2…
Q: Timing is the key in distinguishing between absorption and variable costing. Explain this statement.
A: Definition: Variable costing: It refers to the method of product costing in which the price of the…
Q: When will NOI under the variable costing method show higher income than under the absorption costing
A: Net Operating Income: It is a calculation used to assess the profitability of the business.
Q: Identify the costs included under variable costing.
A: The costs can be distinguished as variable and fixed costs.
Q: Generally speaking, net operating income under variable and absorption costing will: Multiple Choice
A: The correct option is: be equal only when production and sales are equal. Net Operating Income =…
Q: A. What is the net income under variable costing method? B. What is the net income under absorption…
A: solution : What is the net income under variable costing method? Units 10000 Sales…
Q: How are costs assigned differently using the average cost method?
A: Inventory valuation is the valuation of inventory at the time of its purchase and sale using…
Q: Income statement under variable costing method
A: in variable costing method, product costs are only made up of variable expenses like direct…
Q: What is the total variable cost per unit What is the total fixed cost What is the contribution…
A: Contribution margin per unit=Revenue per unit- Variable cost per unitRevenue per unit×100
Q: determine unit cost under variable costing?
A: Costing techniques are important concept used in cost accounting branch. There are two type of…
Q: A changes in direct proportion to changes in the cost-driver level * mixed costs O fixed costs O…
A: If the change in cost and change cost driver level is of direct proportion, it is not fixed cost or…
Q: Explain variable costs, fi:xed costs, average variablecosts, average fixed costs, and average total…
A: As posted multiple sub parts we are answering only first three sub parts kindly repost the…
Q: Assuming that direct labor is a variable cost, the primary difference between the absorption and…
A: Major difference between absorption and variable costing is fixed cost allocation across all units…
Q: Includes gross profit on the income statement. Absorption costing only Generally provides the most…
A: Introduction: Income statement: All incomes and expenses are shown in income statement. It tells the…
Q: It is important to understand variable and fixed costs, average expenses, and the overall costs.
A: Introduction: We're only responding to the first three subparts, so if you have a question that…
Q: Distinguish between fixed and variable costs while dealing with semi-variable expenses.
A: Fixed and variable costs: The term "variable cost" refers to a cost subject to change based on the…
Q: In CPV analysis/ marginal costing, the term contribution is used. What does Contribution mean to…
A:
Q: Difference between variable costing and absorption costing.
A: Absorption costing includes all costs, including fixed costs, related to production, while variable…
Q: 1. What is the net income under variable costing method? 2. What is the net income under absorption…
A: Variable costing means that inventory is valued at variable manufacturing cost and fixed cost is…
Q: difference between absorption costing and variable costing
A: [Note: Since you have posted multiple questions, we will solve the first question for you. For the…
Q: Instructions a. Define the terms variable costs, fixed costs, and mixed costs. b. Classify each cost…
A: Answer a) VARIABLE COST:- A variable cost is an expense that rises or falls in direct proportion to…
Q: Which one of the following technique is mostly used for financial analysis and ?interpretation (Lä…
A: The mostly used technique for financial analysis is Ratio Analysis , which means it is method used…
Q: Describe income statement under variable costing.
A: Income statement: The financial statement which reports revenues and expenses from business…
Q: The product costs per unit under variable costing would be:
A: Variable costs are those costs that change with the change in the number of products manufactured by…
Q: key different in accounting for costs between absorption and variable costing
A: Absorption costing and variable costing are two methods of costing products.
Q: a. What was Product Z’s unit cost under absorption costing? b. What was Product Z’s unit cost under…
A: Absorption costing and Variable costing are two types of costing methods that are being used in the…
Q: Is a variable costing income statement in service operations? If so, provide a hypothetical example…
A: Variable costing income statement deducts all the variable expenses from the revenues to get the…
Q: When units produced equal units sold, how does operating income differ between variable costing and…
A: Definition: Absorption Costing: It is a method of cost accounting where all the costs are related to…
Q: Differences in operating income between variable costing and absorption costing are due solely to…
A: Absorption costing: It refers to the method of product costing in which the price of the product is…
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- Direct material costs $3 per unit, direct labor costs $5 per unit, and overhead is applied at the rate of 100% of the direct labor cost. What is the value of the Inventory transferred to the next department if beginning inventory was 2,000 units; 9,000 units were started; and 1.000 units were in ending inventory? A. $1,000 B. $13,000 C. $130.000 D. $20.000Beginning inventory and direct material cost added during the month total $55,000. What is the value of the ending work in process inventory if beginning inventory was 2,000 units; 9,000 units were started; and 1,000 units were in ending inventory? $1,000 $5,000 $50,000 $55,000Pattison Products, Inc., began operations in October and manufactured 40,000 units during the month with the following unit costs: Fixed overhead per unit = 280,000/40,000 units produced = 7. Total fixed factory overhead is 280,000 per month. During October, 38,400 units were sold at a price of 24, and fixed marketing and administrative expenses were 130,500. Required: 1. Calculate the cost of each unit using absorption costing. 2. How many units remain in ending inventory? What is the cost of ending inventory using absorption costing? 3. Prepare an absorption-costing income statement for Pattison Products, Inc., for the month of October. 4. What if November production was 40,000 units, costs were stable, and sales were 41,000 units? What is the cost of ending inventory? What is operating income for November?
- Last year, Orsen Company produced 25,000 juicers and sold 26,500 juicers for 60 each. The actual variable unit cost is as follows: Fixed overhead was 320,000. Fixed selling expenses consisted of advertising copayments totaling 110,000. Fixed administrative expenses were 236,000. There were no beginning and ending work-in-process inventories. Beginning finished goods inventory was 148,000 for 4,000 juicers. The value of ending inventory reported on the financial statements was Refer to the information in 2.24. The gross margin percentage for last year was a. 12.57% b. 55.67% c. 28.95% d. 38.33%Last year, Orsen Company produced 25,000 juicers and sold 26,500 juicers for 60 each. The actual variable unit cost is as follows: Fixed overhead was 320,000. Fixed selling expenses consisted of advertising copayments totaling 110,000. Fixed administrative expenses were 236,000. There were no beginning and ending work-in-process inventories. Beginning finished goods inventory was 148,000 for 4,000 juicers. The value of ending inventory reported on the financial statements was a. 55,500 b. 92,500 c. 66,500 d. 39,900For each of the following independent situations, calculate the missing values: 1. The Belen plant purchased 78,300 of direct materials during June. Beginning direct materials inventory was 2,500, and direct materials used in production were 73,500. What is ending direct materials inventory? 2. Forster Company produced 14,000 units at an average cost of 5.90 each. The beginning inventory of finished goods was 3,422. (The average unit cost was 5.90.) Forster sold 14,120 units. How many units remain in ending finished goods inventory? 3. Beginning work in process (WIP) was 116,000, and ending WIP was 117,300. If total manufacturing costs were 349,000, what was the cost of goods manufactured? 4. If the conversion cost is 84 per unit, the prime cost is 55, and the manufacturing cost per unit is 105, what is the direct materials cost per unit? 5. Total manufacturing costs for August were 412,000. Prime cost was 64,000, and beginning WIP was 76,000. The cost of goods manufactured was 434,000. Calculate the cost of overhead for August and the cost of ending WIP.
- Variable costingsales exceed production The beginning inventory is 52,800 units. All of the units that were manufactured during the period and 52,800 units of the beginning inventory were sold. The beginning inventory fixed manufacturing costs are 14.70 per unit, and variable manufacturing costs are 30 per unit. Determine (A) whether variable costing operating income is less than or greater than absorption costing operating income, and (B) the difference in variable costing and absorption costing operating income.A company started a new product, and in the first month started 100,000 units. The ending work in process inventory was 20,000 units that were 100% complete with materials and 75% complete with conversion costs. There were 100,000 units to account for, and the equivalent units for materials was $6 per unit while the equivalent units for conversion was $8 per unit. What is the value of the inventory transferred out, using the weighted-average inventory method?Appendix Absorption costing income statement On June 30, the end of the first month of operations, Tudor Manufacturing Co. prepared the following income statement, based on the variable existing concept: Sales (420,000 units) 7,450,000 Variable cost of goods sold: Variable cost of goods manufactured (500,000 units x 14 per unit) 7,000,000 Less ending inventory (80,000 units x 14 per unit) 1,120,000 Variable cost of goods sold 5,880,000 Manufacturing margin 1,570,000 Variable selling and administrative expenses 80,000 Contribution margin 1,490,000 Fixed costs: Fixed manufacturing costs 160,000 Fixed selling and administrative expenses 75,000 235,000 Income from operations 1,255,000 a. Prepare an absorption costing income statement. b. Reconcile the variable costing income from operations of 1,255,000 with the absorption costing income from operations determined in (a).
- Using the weighted-average method, compute the equivalent units of production for a new company that started 85,000 units into production and transferred 67,000 to the second department. Assume that beginning inventory was 0. Conversion is considered to occur evenly throughout the process, while materials are added at the beginning of the process. The ending inventory for Equivalent Units: Conversion is 9,000 units.Sterling Corporation has an EOQ of 5,000 units. The company uses an average of 500 units per day. An order to replenish the part requires a lead time of five days. Required: 1. Calculate the reorder point, using Equation 20.3. 2. Graphically display the reorder point, where the vertical axis is inventory (units) and the horizontal axis is time (days). Show two replenishments, beginning at time zero with the economic order quantity in inventory. 3. What if the average usage per day of the part is 500 units but a daily maximum usage of 575 units is possible? What is the reorder point when this demand uncertainty exists?Refer to Cornerstone Exercise 18.3. Required: 1. Calculate the cost of each unit using variable costing. 2. How many units remain in ending inventory? What is the cost of ending inventory using variable costing? 3. Prepare a variable-costing income statement for Pattison Products, Inc., for the month of October. 4. What if November production was 40,000 units, costs were stable, and sales were 41,000 units? What is the cost of ending inventory? What is operating income for November?