Cost Accounting
Cost Accounting
15th Edition
ISBN: 9780133428834
Author: Horngren
Publisher: PEARSON
Question
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Chapter 12, Problem 12.19E

1.

To determine

The operating income in both the year 2012 and 2013.

Given information:

For the year 2012,

The number of T-shirts sold is 205,000.

The average selling price is $32 per T-shirt.

The number of T-shirts purchased is 225,500.

The average cost per T-shirt is $17.

The administrative cost is $1,739,000.

For the year 2013,

The number of T-shirts sold is 233,000.

The average selling price is $33 per T-shirt.

The number of T-shirts purchased is 257,000.

The average cost per T-shirt is $15.

The administrative cost is $1,691,000.

2.

To determine

The growth, price recovery and productivity components that explain the change in operating income.

Given information:

The actual units of T-shirts sold in 2013 are 233,000.

The actual units of T-shirts sold in 2012 are 205,000.

The selling price in 2012 is $32.

The actual units of T-shirts used to produce output in 2012 are 225,500.

The cost of the T-shirt in 2012 is $17.

The administrative capacity is 4,700 customers.

The administrative costs are $1,739,000.

3.

To determine

To explain: The answers in requirement 2 and the indication of each component.

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