World Strings produces student-grade violins for beginning violin students. The company produced 2,700 violins in its first month of operations. At month end, 800 finished violins remained unsold. There was no inventory in work in process. Violins were sold for $120.00 each. Total costs from the month are as follows:The table shows the following data with cost in dollars: Direct materials used - 120,300 Direct labor - 65,000 Variable manufacturing overhead - 28,000 Fixed manufacturing overhead - 64,800 Variable selling and administrative expenses - 10,000 Fixed selling and administrative expenses - 12,900437The company prepares traditional (absorption costing) income statements for its bankers. World Strings would also like to prepare contribution margin income statements for management use. Compute the following amounts that would be shown on these income statements:1. Gross profit2. Contribution margin3. Total expenses shown below the gross profit line4. Total expenses shown below the contribution margin line5. Dollar value of ending inventory under absorption costing6. Dollar value of ending inventory under variable costing7. Which income statement will have a higher operating income? By how much? Explain.

Name: World Strings produces student-grade violins for beginning violin stud
Uploaded: 2024-03-20T06:32:49.000Z
Channel: Bartleby
Description: World Strings produces student-grade violins for beginning violin students. The company produced 2,700 violins in its first month of operations. At month end, 800 finished violins remained unsold. There was no inventory in work in process. Violins we

Under absorption costing ,product cost consists of direct material,direct labor,variable…

Answered: World Strings produces student-grade…

Managerial Accounting

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 3E: Fresno Industries Inc. manufactures and sells high-quality camping tents. The company began...

See similar textbooks

Related questions

Concept explainers

Topic Video

Question

World Strings produces student-grade violins for beginning violin students. The company produced 2,700 violins in its first month of operations. At month end, 800 finished violins remained unsold. There was no inventory in work in process. Violins were sold for $120.00 each. Total costs from the month are as follows:

The table shows the following data with cost in dollars: Direct materials used - 120,300 Direct labor - 65,000 Variable manufacturing overhead - 28,000 Fixed manufacturing overhead - 64,800 Variable selling and administrative expenses - 10,000 Fixed selling and administrative expenses - 12,900

437

The company prepares traditional (absorption costing) income statements for its bankers. World Strings would also like to prepare contribution margin income statements for management use. Compute the following amounts that would be shown on these income statements:
1. 1. Gross profit
2. 2. Contribution margin
3. 3. Total expenses shown below the gross profit line
4. 4. Total expenses shown below the contribution margin line
5. 5. Dollar value of ending inventory under absorption costing
6. 6. Dollar value of ending inventory under variable costing
7. 7. Which income statement will have a higher operating income? By how much? Explain.

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 7 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions