ANswer 1 to 3 Exercise 3 (Variable Costing Unit Product Cost and Income Statement;Break-even)PC Desk, Inc., makes an oak desk specially designed for personal computers.The desk sells for P2,000. Data for last year's operations follow:Units in beginning inventory.Units produced...Units sold. .Units in ending inventory.....10,0009,0001,000......Variable costs per unit:Direct materials...Direct labor ...Variable manufacturing overhead..Variable selling and administrativeTotal variable cost per unit. ..P 600300100200P1.200Fixed costs:Fixed manufacturing overhead...Fixed selling and administrative.Total fixed costs...P3,000,0004,500,000P7,500.000Required:1. Assume that the company uses variable costing. Compute the unit productcost for one computer desk.2. Assume that the company uses variable costing. Prepare an incomestatement for the year using the contribution format.3. What is the company's break-even point in terms of units sold?

Formula: BEP (Units)= Fixed CostContribution Contribution= Sales- Varibale cost Cost Per Unit= Total…

Required: 1. Assume that the company uses variable costing. Compute the unit product cost for one computer desk. 2. Assume that the company uses variable costing. Prepare an income statement for the year using the contribution format. 3. What is the company's break-even point in terms of units sold?

Required: 1. Assume that the company uses variable costing. Compute the unit product cost for one computer desk. 2. Assume that the company uses variable costing. Prepare an income statement for the year using the contribution format. 3. What is the company's break-even point in terms of units sold?

Accounting

27th Edition

ISBN:9781337272094

Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Chapter21: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 21.28EX: Appendix Absorption costing income statement On June 30, the end of the first month of operations,...

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Variable-Costing and Absorption-Costing Income Borques Company produces and sells wooden pallets that are used for moving and stacking materials. The operating costs for the past year were as follows: During the year, Borques produced 200,000 wooden pallets and sold 204,300 at 9 each. Borques had 8,200 pallets in beginning finished goods inventory; costs have not changed from last year to this year. An actual costing system is used for product costing. Required: 1. What is the per-unit inventory cost that is acceptable for reporting on Borquess balance sheet at the end of the year ? How many units are in ending inventory? What is the total cost of ending inventory? 2. Calculate absorption-costing operating income. 3. CONCEPTUAL CONNECTION What would the per-unit inventory cost be under variable costing? Does this differ from the unit cost computed in Requirement 1? Why? 4. Calculate variable-costing operating income. 5. Suppose that Borques Company had sold 196,700 pallets during the year. What would absorption-costing operating income have been? Variable-costing operating income?
Starling Co. manufactures one product with a selling price of 18 and variable cost of 12. Starlings total annual fixed costs are 38,400. If operating income last year was 28,800, what was the number of units Starling sold? a. 4,800 b. 6,400 c. 5,600 d. 11,200
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.
Refer to Cornerstone Exercise 3.4 for data on Dohini Manufacturing Companys purchasing cost and number of purchase orders. The controller for Dohini Manufacturing ran regression on the data, and the coefficients shown by the regression program are: Required: 1. Construct the cost formula for the purchasing activity showing the fixed cost and the variable rate. 2. If Dohini Manufacturing Company estimates that next month will have 430 purchase orders, what is the total estimated purchasing cost for that month? (Round your answer to the nearest dollar.) 3. What if Dohini Manufacturing wants to estimate purchasing cost for the coming year and expects 5,340 purchase orders? What will estimated total purchasing cost be? (Round your answer to the nearest dollar.) What is the total fixed purchasing cost? Why doesnt it equal the fixed cost calculated in Requirement 1?
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).
A company sells small motors as a component part to automobiles. The Model 101 motor sells for $850 and has per-unit variable costs of $400 associated with its production. The company has fixed expenses of $90,000 per month. In August, the company sold 425 of the Model 101 motors. A. Calculate the contribution margin per unit for the Model 101. B. Calculate the contribution margin ratio of the Model 101. C. Prepare a contribution margin income statement for the month of August.
QUESTION 2: ABSORPTION AND VARIABLE COSTING AND BUDGETING ( Good Toys Company produces a toy product. Data concerning the company’s operations last year appear below: Units in beginning inventory 0 Units produced 15,000 Units sold 12,000 Selling price per unit $110 Variable cost per unit: Direct materials $30 Direct labour $20 Variable manufacturing overhead $10 Variable selling and administrative costs $8 Fixed costs in total: Fixed manufacturing overhead $225,000 Fixed selling and administrative costs $280,000 Required (show your calculations):Prepare a variable costing income statement for the year. Type in answers to Question 2. a. (expand the space as needed) Client Solutions is working on its direct labour…
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.
3. Prepare a variable-costing income statement for Pattison Products, Inc., for the month of October. 4. What if November production was 48,000 units, costs were stable, and sales were 49,000 units? What is the cost of ending inventory? If an amount is zero, enter "0". 5. What is operating income for November?
Question Q1Moona Inc. produces Mobile phones. Information of the company's operations last year appear below: Fixed cost:Fixed Manufacturing overhead Rs 40,000Fixed Selling & Administrative Rs 60,000Selling Price per unit Rs 100Variable cost per unit:Direct Materials Rs 30Direct labor Rs 10Variable Manufacturing overhead Rs 5Variable Selling & Administrative Rs 2Units In beginning Inventory 0Units Produced 2000Units Sold 1900 Required: a. Compute the unit product cost under both absorption and variable costing.b. Prepare an income statement for the year using absorption costing.c. Prepare a contribution format income statement for the year using variable costing. d. Prepare a report reconciling the difference in net operating income between absorption and variable costing for the year.
Subject: Cost management & accounting Question No. 3: Absorption and Marginal CostingThe Dorset Corporation produces and sells a single product. The following data refer to the year just completed:Beginning inventory 0Units produced 10,000Units sold 8,000Selling price per unit $50Selling and administrative expenses:Variable per unit $5Fixed per year $60,000Manufacturing costs:Direct materials cost per unit $10Direct labor cost per unit $6Variable manufacturing overhead cost per unit $5Fixed manufacturing overhead per year $80,000Assume that direct labor is a variable cost.Required:a. Prepare an income statement for the year using absorption costing and variable costingb. Reconcile the absorption costing and variable costing net operating income figures
do part 4,5 ASAP!! Hobbs Company produces one product for which following is information is available. Product A $ per unit Selling price 6.00 Direct Material 2.50 Direct Labor 1.40 Variable overhead 1.10 Total Fixed cost $ 120,000 per annum Sales units 200,000 per annum Required: Calculate contribution margin per unit. Calculate break even point in units. Calculate break even point in sales value. Calculate profit for the year based on total contribution. Calculate Margin of safety in units and percentage of sales.