Speedy Motors assembles and sells motor vehicles and uses standard costing. Actual data relating to April and May 2020 are as follows: LOADING... (Click the icon to view the data.) The selling price per vehicle is $25,000. The budgeted level of production used to calculate the budgeted fixed manufacturing cost per unit is 500 units. There are no price, efficiency, or spending variances. Any production-volume variance is written off to cost of goods sold in the month in which it occurs. Read the requirements LOADING... . Requirement 1. Prepare April and May 2020 income statements for Speedy Motors under (a) variable costing and (b) absorption costing. (a) Prepare April and May 2020 income statements for Speedy Motors under variable costing. Complete the top half of the income statement for each month first, then complete the bottom portion. (Complete all input fields. Enter a "0" for any zero balance accounts.) April 2020 May 2020 Speedy Motors assembles and sells motor vehicles and uses standard costing. Actual data relating to April and May 2020 are as follows: LOADING... (Click the icon to view the dat

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter5: Inventories And Cost Of Goods Sold

Section: Chapter Questions

Problem 5.23MCE

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Question

Speedy

Motors assembles and sells motor vehicles and uses standard costing. Actual data relating to April and May

2020

are as follows:

(Click

the icon to view the data.)

The selling price per vehicle is

$25,000.

The budgeted level of production used to calculate the budgeted fixed manufacturing cost per unit is

500

units. There are no price, efficiency, or spending variances. Any production-volume variance is written off to cost of goods sold in the month in which it occurs.

Read the

requirements

Requirement 1. Prepare April and May

2020

income statements for

Speedy

Motors under (a) variable costing and (b) absorption costing.

(a) Prepare April and May

2020

income statements for

Speedy

Motors under variable costing. Complete the top half of the income statement for each month first, then complete the bottom portion. (Complete all input fields. Enter a "0" for any zero balance accounts.)

			April 2020	May 2020

Speedy

Motors assembles and sells motor vehicles and uses standard costing. Actual data relating to April and May

2020

are as follows:

(Click

the icon to view the data.)

The selling price per vehicle is

$25,000.

The budgeted level of production used to calculate the budgeted fixed manufacturing cost per unit is

500

units. There are no price, efficiency, or spending variances. Any production-volume variance is written off to cost of goods sold in the month in which it occurs.

Read the

requirements

Requirement 1. Prepare April and May

2020

income statements for

Speedy

Motors under (a) variable costing and (b) absorption costing.

(a) Prepare April and May

2020

income statements for

Speedy

			April 2020	May 2020

Data Table
A
B
C
April
May
2 Unit data:
3 Beginning inventory
150
4
Production
500
475
5
Sales
350
605
6 Variable costs:
7 Manufacturing cost per unit produced
$
8,000| $
8,000
8 Operating (marketing) cost per unit sold
3,400
3,400
9 Fixed costs:
10 Manufacturing costs
11 Operating (marketing) costs
the
$ 2,250,000 $ 2,250,000
550,000
550,000
LO

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

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