1.
The operating income in both the year 2016 and 2017.
Given information:
For the year 2013,
The number of machines sold is 200.
The average selling price is $40,000 per machine.
The number of machines purchased is 300,000.
The direct materials cost per kg is $8.
The conversion cost is $2,000,000.
The selling and customer service cost is $1,000,000.
For the year 2014,
The number of machines sold is 210.
The average selling price is $42,000 per machine.
The number of machines purchased is 310,000.
The direct materials cost per kg is $8.50.
The conversion cost is $2,025,000.
The selling and customer service cost is $940,500.
2.
The growth, price recovery and productivity components that explain the change in operating income.
Given information:
The actual units of machines sold in 2014 are 210.
The actual units of machines sold in 2013 are 200.
The selling price in 2013 is $40,000.
The actual kgs of materials used to produce output in 2013 are 300,000.
The actual units of machines required to sell are 225,000.
The material cost per unit in 2013 is $8.
The conversion capacity is 250.
The conversion costs are $2,000,000.
3.
To explain: The answers in requirement 2 and the indication of each component.
Want to see the full answer?
Check out a sample textbook solution
Chapter 12 Solutions
COST ACCOUNTING
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education