I need some help Oglvy Company manufactures and sells one product. The following Information pertains to each of the company's first three years ofoperations:Variable cost per unit:Direct materials26Fixed costs per year:Direct labor$1,330, e0eFixed manufacturing overheadFixed selling and administrative expenses832, 00e24266, 000The company does not Incur any varlable manufacturing overhead costs or varlable selling and administrative expenses. During Its firstyear of operations, Oglivy produced 70,000 units and sold 70,000o units. During Its second year of operatlons, It produced 70,000 unitsand sold 66,200 units. In its third year, Oglvy produced 70,000 units and sold 73,800 units. The selling price of the company's productIs $61 per unlt.Requlred:1. Assume the company uses super-varlable costing:a. Compute the unit product cost for Year 1, Year 2, and Year 3.b. Prepare an Income statement for Year 1, Year 2, and Year 3.2. Assume the company uses a varlable costing system that assigns $19 of direct labor cost to each unit produced:a. Compute the unit product cost for Year 1, Year 2, and Year 3.b. Prepare an Income statement for Year 1, Year 2, and Year 3.3. Reconcile the difference between the super-varlable costing and variable costing net operating Incomes In Years 1, 2, and 3.Complete this question by entering your answers in the tabs below.Req 1AReq 18Req 24Req 28Req 3Reconcile the difference between the super-variable costing and variable costing net operating incomes in Years 1, 2, and 3.Year 1Year 2Year 3Super-variable costing net operating income (loss)Variable costing net operating income (loss) Tamis .Creations, IneIncome StatementFor the Quarter Ended March 31$ 1,148,000Sales (28,78e units)Variable expenses:Variable cost of goods soldVariable selling and administrativeContribution margin$ 482,160192, 290674,458473, 55eFixed expenses:Fixed manufacturing overheadFixed selling and administrative285, 300201,750487, eseNet operating loss$ ( 13,500)Ms. Tyler Is discouraged over the loss shown for the quarter, particularly because she had planned to use the statement as support fora bank loan. Another friend, a CPA, Insists that the company should be using absorption costing rather than varlable costing andargues that If absorptlon costing had been used the company probably would have reported at least some profit for the quarter.At this polnt, Ms. Tyler Is manufacturing only one product-a swimsult. Production and cost data relating to the swimsult for the firstquarter follow:Units produced31,700Units soldVariable costs per unit:Direct materialsDirect labor28,700$ 7.60$ 7.30$ 1.90$ 6.70Variable manufacturing overheadVariable selling and administrativeRequired:1. Complete the following:a. Compute the unit product cost under absorption costing.b. What Is the company's absorption costing net operating Income (loss) for the quarter?c. Reconcile the varlable and absorption costing net operating income (loss) figures.3. During the second quarter of operations, the company agaln produced 31,700 units but sold 34,700 units. (Assume no change Intotal fixed costs.)a. What Is the company's varlable costing net operating Income (loss) for the second quarter?b. What Is the company's absorption costing net operating Income (loss) for the second quarter?C. Reconcile the varlable costing and absorption costing net operating Incomes for the second quarter.

Variable costs: These costs are incurred in conjunction to the volume of goods produced or sold. It…

Oglvy Company manufactures and sells one product. The following information pertalns to each of the company's first three years of operations: Variable cost per unit: Direct materials 26 Fixed costs per year: Direct labor $1,330, e0e Fixed manufacturing overhead Fixed selling and administrative expenses $ 832, 000 $ 266,000 The company does not incur any varlable manufacturing overhead costs or varlable selling and administrative expenses. During its first year of operations, Oglvy produced 70,000 units and sold 70,000 units. During Its second year of operations, It produced 70,000 units and sold 66,200 units. In its third year, Ogilvy produced 70,000 units and sold 73,800 units. The selling price of the company's product Is $61 per unit. Requlred: 1. Assume the company uses super-varlable costing: a. Compute the unit product cost for Year 1, Year 2, and Year 3. b. Prepare an Income statement for Year 1, Year 2, and Year 3. 2. Assume the company uses a varlable costing system that assigns $19 of direct labor cost to each unit produced: a. Compute the unit product cost for Year 1, Year 2, and Year 3. b. Prepare an income statement for Year 1, Year 2, and Year 3. 3. Reconcile the difference between the super-variable costing and varlable costing net operating incomes in Years 1, 2, and 3.

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 9E: The following data were adapted from a recent income statement of Caterpillar Inc. (CAT) for the...