Variable Costing Income Statement
Q: Explain unit product cost under variable costing.
A: Variable Costing: “Variable costing is a method that allocates only variable manufacturing costs to…
Q: What are the methods used for absorption costing and variables costing?
A: Absorption Costing System is also known as full Costing. It is Used in Valuing inventory. It…
Q: Explain the difference between total variable costs and variable costs per unit.
A: Cost can be categorized as variable and fixed costs.
Q: total cost function
A: We know that fixed cost remains constant irrespective of the level of activity and variable cost…
Q: Difference between standard cost and actual cost.
A: A standard cost is a pre-determined or pre-established cost to make a unit of finished product.…
Q: Explain the methods of segregating semi-variable costs into fixed and variable cost.
A: Variable cost is the cost which remains variable and fluctuate according to the level of production.…
Q: cuss the advantages and disadvantages of using variable costing
A: Answer: Variable costing is the costing system that is variable as per unit produced. The advantages…
Q: unit product cost under variable costing
A: Variable costing only takes into account the variable costs to compute the total cost.
Q: What are the steps in developing a budgeted variable overhead cost-allocation rate?
A:
Q: costs that change proportionately according to the changes in the cost driver.......
A: variable costs are the costs that change according to the changes in the cost drivers or changes…
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: Net income under Variable costing Method
A: Solution:- Calculation of Income under Variable costing method as follows:- Note:- Calculation of…
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: Critically evaluate the concept and application of marginal costing
A: Concept of marginal costing: Marginal cost is the difference between total costs increasing or…
Q: Explain variable overhead costs.
A: Variable Costing: “Variable costing is a method that allocates only variable manufacturing costs to…
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: Income statement under variable costing method
A: in variable costing method, product costs are only made up of variable expenses like direct…
Q: determine unit cost under variable costing?
A: Costing techniques are important concept used in cost accounting branch. There are two type of…
Q: Explain the variable costing income statement and provide a hypothetical example of a variable…
A: Income statement is prepared to assess the performance of a firm for an accounting period. Income…
Q: Question 4: Define the following:…
A: Variable cost refers to that cost which variate with the variations in the production or sales…
Q: Relevant Range of Fixed and Variable cost with the help of example and graph
A: Cost: In accounting, the cost is related to monetary value spend on raw material, services, and…
Q: How can variable costing be used in service companies?
A: Variable Costing: The variable costing is the method of costing in which only the variable…
Q: What is variable costing?
A: Variable Costing: “Variable costing is a method that allocates only variable manufacturing costs to…
Q: Average Costing
A: Particulars Cost 250 chairs @$13 $3,250 50 chairs @$15 $750 72 chairs @$20 $1,440 372 chairs…
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: Explain the difference between - Absorption and Marginal Costing
A: The Question has covered the concept of Absorption and Marginal Costing. Absorption Costing The…
Q: Difference between variable costing and absorption costing.
A: Absorption costing includes all costs, including fixed costs, related to production, while variable…
Q: Define normal costing
A: Process Costing: Process costing is a method of cost accounting, which is used when the production…
Q: Required: When compared to variable costing income, Gem's absorption costing income is
A: Solution:- Given, Inventory for Gem's sole product totaled = 6,000 units and 5,200 units…
Q: Critically evaluate the concept and application of marginal costing
A: Marginal Costing :— Marginal Costing is the Part of Cost management Techniques. Marginal Costing…
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: 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: Explain the impact of an increase in the level of activity (or cost driver) on (a) total variable…
A: (a)
Q: Overall Unit Contribution Margin:
A:
Q: Briefly explain the difference between absorption costing and variable costing.
A: Costing: Costing is a technique used in cost accounting to determine the cost of a product. With…
Q: Distinguish between fixed cost and variable cost.
A: Fixed Costs: These are the costs that remain constant in total dollar amount irrespective to 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: total cost
A: We know that fixed cost remains constant irrespective of the level of activity and variable cost…
(8) Variable:
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- Income Statements under Absorption and Variable Costing In the coming year, Kalling Company expects to sell 28,700 units at 32 each. Kallings controller provided the following information for the coming year: Required: 1. Calculate the cost of one unit of product under absorption costing. 2. Calculate the cost of one unit of product under variable costing. 3. Calculate operating income under absorption costing for next year. 4. Calculate operating income under variable costing for next year.Contribution margin, break-even sales, cost-volume-profit chart, margin of safety, and operating leverage Belmain Co. expects to maintain the same inventories at the end of 20Y7 as at the beginning of the year. The total of all production costs for the year is therefore assumed to be equal to the cost of goods sold. With this in mind, the various department heads were asked to submit estimates of the costs for their departments during the year. A summary report of these estimates is as follows: It is expected that 12,000 units will be sold at a price of 240 a unit. Maximum sales within the relevant range are 18,000 units. Instructions 1. Prepare an estimated income statement for 20Y7. 2. What is the expected contribution margin ratio? 3. Determine the break-even sales in units and dollars. 4. Construct a cost-volume-profit chart indicating the break-even sales. 5. What is the expected margin of safety in dollars and as a percentage of sales? (Round to one decimal place.) 6. Determine the operating leverage.Cost Classification Loring Company incurred the following costs last year: Required: 1. Classify each of the costs using the following table format. Be sure to total the amounts in each column. Example: Direct materials, 216,000. 2. What was the total product cost for last year? 3. What was the total period cost for last year? 4. If 30,000 units were produced last year, what was the unit product cost?
- Garrett Company provided the following information: Common fixed cost totaled 46,000. Garrett allocates common fixed cost to Product 1 and Product 2 on the basis of sales. If Product 2 is dropped, which of the following is true? a. Sales will increase by 300,000. b. Overall operating income will increase by 2,600. c. Overall operating income will decrease by 25,000. d. Overall operating income will not change. e. Common fixed cost will decrease by 27,600.Ellerson Company provided the following information for the last calendar year: During the year, direct materials purchases amounted to 278,000, direct labor cost was 189,000, and overhead cost was 523,000. During the year, 100,000 units were completed. Refer to Exercise 2.21. Last calendar year, Ellerson recognized revenue of 1,312,000 and had selling and administrative expenses of 204,600. Required: 1. What is the cost of goods sold for last year? 2. Prepare an income statement for Ellerson for last year.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?
- Salespersons report and analysis Walthman Industries Inc. employs seven salespersons to sell and distribute its product throughout the state. Data taken from reports received from the salespersons during the year ended December 31 are as follows: Instructions 1. Prepare a table indicating contribution margin, variable cost of goods sold as a percent of sales, variable selling expenses as a percent of sales, and contribution margin ratio by salesperson. (Round whole percent to one digit after decimal point.) 2. Which salesperson generated the highest contribution margin ratio for the year and why? 3. Briefly list factors other than contribution margin that should be considered in evaluating the performance of salespersons.When prices are falling (deflation), which costing method would produce the highest gross margin for the following? Choose first-in, first-out (FIFO); last-in, first-out (LIFO); or weighted average, assuming that B62 Company had the following transactions for the month. Calculate the gross margin for each of the following cost allocation methods, assuming B62 sold just one unit of these goods for $400. Provide your calculations. A. first-in, first-out (FIFO) B. last-in, first-out (LIFO) C. weighted average (AVG)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.
- Cost of Goods Manufactured, Income Statement W. W. Phillips Company produced 4,000 leather recliners during the year. These recliners sell for 400 each. Phillips had 500 recliners in finished goods inventory at the beginning of the year. At the end of the year, there were 700 recliners in finished goods inventory. Phillips accounting records provide the following information: Required: 1. Prepare a statement of cost of goods manufactured. 2. Compute the average cost of producing one unit of product in the year. 3. Prepare an income statement for external users.Quality Cost Report Loring Company had total sales of 2,400,000 for fiscal 20X1. The costs of quality-related activities are given below. Required: 1. Prepare a quality cost report, classifying costs by category and expressing each category as a percentage of sales. What message does the cost report provide? 2. Prepare a bar graph and pie chart that illustrate each categorys contribution to total quality costs. Comment on the significance of the distribution.Cost of goods sold Pine Creek Company completed 200,000 units during the year at a cost of 3,000,000. The beginning finished goods inventory was 25,000 units at 310,000. Determine the cost of goods sold for 210,000 units, assuming a FIFO cost flow.