QUESTION 4 Garfield Electronics Sdn Bhd manufacturers a product called LED casing. In year 2017, 80,000 units of LED casing had been sold with RM 50.00 per casing. Additional information as per below : Cost RM Direct Material 8 Direct Labour 12 Variable Overhead 4 Fixed Factory Overhead 3 Administrative and Selling Expenses : Variable Fixed You are required to : Prepare an income statement for Garfield Electronics Sdn Bhd by using Absorption Costing Approach and Marginal Cost Approach. 22

QUESTION 4 Garfield Electronics Sdn Bhd manufacturers a product called LED casing. In year 2017, 80,000 units of LED casing had been sold with RM 50.00 per casing. Additional information as per below : Cost RM Direct Material 8 Direct Labour 12 Variable Overhead 4 Fixed Factory Overhead 3 Administrative and Selling Expenses : Variable Fixed You are required to : Prepare an income statement for Garfield Electronics Sdn Bhd by using Absorption Costing Approach and Marginal Cost Approach. 22

Financial & Managerial Accounting

14th Edition

ISBN:9781337119207

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter18: Activity-Based Costing

Section: Chapter Questions

Problem 2ADM

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Question ii) Huzaifa’s Company produces and sells a single product - cricket bat. Selected costs and operating data relating to the product are given below for the year ended 2017. Opening Inventory 5,000 units, selling price $45, total sales 40,000 units. Variable costs per unit: DM $7, DL $5, MOH $3, selling and admin expense is 40% of Direct labor. Fixed MOH $5 per unit. Total fixed selling and admin expense ratio is 0.875:1 to total fixed manufacturing overhead. The company’s total production is seven times to its opening inventory. Required: ii1.. Compute the unit product cost for Variable Costing and Absorption Costing. ii2. Prepare Variable and Absorption Costing income statement for year ended 2017. ii3. Explain briefly why net operating income differs between variable and absorption costing.
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QUESTION 2 ABC Sdn Bhd is producing a product called BB. Below are the cost information provided by Manager of BB production. Selling price RM 30.00 Direct material RM 2.80 Direct labour RM 8.00 Variable manufacturing overhead RM 1.20 Variable non-manufacturing overhead RM 0.80 Fixed production overhead (per production unit) RM 3.50 Fixed administration and general overhead RM 12,200 Fixed selling and distribution overhead RM 4,100 Production 5,000 units Sales 5,200 units Closing stock 500 units Opening stock 700 units Required: A) Prepare the Income Statement of ABC Enterprise for the second half year 2020 using Marginal Costing. B) Prepare the Income Statement of ABC Enterprise for the second half year 2020 using Absorption Costing. C) Prepare the reconciliation for the difference in the profits under the two costing approaches.
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Question 2 Mika Sdn Bhd manufacture vase branded as Flora for local market. The following is the information on production cost and other expenses related to July 2021. Details of cost elements 2000 Units of Vases (RM) Fixed Administration expenses 4,500 Indirect labour 9,500 Power 1,000 Fixed Rental 1,400 Selling and Distribution 6,500 Direct labour 25,000 Factory supplies 2,500 Direct materials 50,000 Total cost 64,200 The averages selling price of the vase is RM50.20 per unit. The maximum capacity of the production is 10,000 vase per month. Required: (a). Calculate the break even point (in unit and RM) for Mika Sdn Bhd. (b). What should be the new selling price for the company to break even if it can only sell 1,500 vases per month? (c). Based on (a) above, calculate the expected net profit at a sales level of 3,000 vases when an additional commission of RM1 per vase is incurred after the…
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Problem 4Sales Price Php 300 per unitFixed Cost:Marketing and administrative Php 24,000.00 per periodManufacturing overhead Php 30,000.00 per periodVariable Cost:Marketing and administrative Php 6 per unitManufacturing overhead Php 9 per unitDirect Labor Php 30 per unitDirect Materials Php 60 per unitUnit Produced and sold Php 1,200 per periodRequired: 1. Variable manufacturing cost per unit2. Variable cost per unit3. Full manufacturing cost per unit4. Full cost to make and sell per unit5. Compute Net income
fix my answer: 5)Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 36,000 Rets per year. Costs associated with this level of production and sales are given below: Unit Total Direct materials $ 25 $ 900,000 Direct labor 8 288,000 Variable manufacturing overhead 3 108,000 Fixed manufacturing overhead 7 252,000 Variable selling expense 4 144,000 Fixed selling expense 6 216,000 Total cost $ 53 $ 1,908,000 The Rets normally sell for $58 each. Fixed manufacturing overhead is $252,000 per year within the range of 26,000 through 36,000 Rets per year. Required: Assume due to a recession, Polaski Company expects to sell only 26,000 Rets through regular channels next year. A large retail chain offered to purchase 10,000 Rets if Polaski will accept a 16% discount off the regular price. There would be no sales commissions on this order; thus, variable selling expenses would be slashed by 75%.…
Q2: The variable costing income statement for Gaza Company is seen below:Sales (6,000 units × $35) $210,000Variable expenses:Beginning inventory (680 units × $20) $13,600Variable cost of goods manufactured(6,400 units × $20) 128,000Available for sale 141,600Less: Ending inventory (1,080 units × $20) 21,600Variable manufacturing cost of goods sold 120,000Variable selling and administrative expenses 24,000Contribution margin 66,000Fixed expenses:Fixed factory overhead 20,000Fixed selling and administrative expenses 15,300Operating income $30,700Required:Prepare an absorption-costing income statement for the same period of time. Assume that actual fixed costs were equal to budgeted fixed costs and the budgeted fixed overhead rate was constant over the period examined. Assume the production volume variance equals zero.
Problem 4Sales Price Php 300 per unitFixed Cost:Marketing and administrative Php 24,000.00 per periodManufacturing overhead Php 30,000.00 per periodVariable Cost:Marketing and administrative Php 6 per unitManufacturing overhead Php 9 per unitDirect Labor Php 30 per unitDirect Materials Php 60 per unitUnit Produced and sold Php 1,200 per periodRequired: 4. Full cost to make and sell per unit5. Compute Net income