CONNECT ONLINE ACCESS F/MANAGERIAL ACC.
6th Edition
ISBN: 9781264445356
Author: Noreen
Publisher: MCG
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Chapter 4A, Problem 4A.3E
Super-Variable Costing and Variable Costing Unit Product Costs and Income Statements LO4—2. LO4—6
Kelly Company manufactures and sells one product. The following information pertains to each of the company’s first two years of operations:
The company does not incur any variable
Required:
- Assume the company uses super-variable costing:
- Compute the unit product cost for Year 1 and Year 2.
- Prepare an income statement for Year 1 and Year 2.
- Assume the company uses a variable costing system that assigns $10 of direct labor cost to each unit produced:
- Compute the unit product cost for Year 1 and Year 2.
- Prepare an income statement for Year 1 and Year 2.
- Prepare a reconciliation that explains the difference between the super-variable costing and variable costing net operating incomes in Years 1 and 2.
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Required information
[The following information applies to the questions displayed below.]
Diego Company manufactures one product that is sold for $75 per unit in two geographic regions-the East and West
regions. The following information pertains to the company's first year of operations in which it produced 46,000 units and
sold 42,000 units.
Variable costs per unit:
Manufacturing:
Direct materials
Direct labor
Variable manufacturing overhead
Variable selling and administrative
Fixed costs per year:
Fixed manufacturing overhead
Fixed selling and administrative expense
Break even point
$ 25
$ 20
The company sold 31,000 units in the East region and 11,000 units in the West region. It determined that $200,000 of its
fixed selling and administrative expense is traceable to the West region, $150,000 is traceable to the East region, and the
remaining $38,000 is a common fixed expense. The company will continue to incur the total amount of its fixed
manufacturing…
Q – 5:
Bettina Company incurs the following costs to produce and sell a single product.
Variable costs per unit:
Direct materials $15
Direct labor$7.5
Variable manufacturing overhead$3
Variable selling and administrative expenses$6
Fixed costs per year:
Fixed manufacturing overhead . . . . . . . . . . . . . . . . . $45,000
Fixed selling and administrative expenses . . . . . . . $150,000
During the last year, 15,000 units were produced and 12,500 units were sold. The Finished Goods inventory account at the end of the year shows a balance of $63,750 for the 2,500 unsold units.
Required:
1. Is the company using absorption costing or variable costing to cost units in the Finished Goods inventory account? Show computations to support your answer.
2. Assume that the company wishes to prepare financial statements for the year to issue to its stockholders.
a. Is the $63,750 figure for Finished Goods inventory the correct amount to use on these…
Problem 6-18 (Algo) Variable and Absorption Costing Unit Product Costs and Income Statements [LO6-1,
LO6-2]
Haas Company manufactures and sells one product. The following information pertains to each of the company's first three years of
operations:
Variable costs per unit:
Manufacturing:
Direct materials
Direct labor
Variable manufacturing overhead
Variable selling and administrative
Fixed costs per year:
Fixed manufacturing overhead
Fixed selling and administrative expenses
During its first year of operations, Haas produced 60,000 units and sold 60,000 units. During its second year of operations, It
produced 75,000 units and sold 50,000 units. In its third year, Haas produced 40,000 units and sold 65,000 units. The selling price of
the company's product is $52 per unit.
Required:
1. Compute the company's break-even point in unit sales.
2. Assume the company uses varlable costing:
a. Compute the unit product cost for Year 1, Year 2, and Year 3.
b. Prepare an income statement for Year…
Chapter 4A Solutions
CONNECT ONLINE ACCESS F/MANAGERIAL ACC.
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- S aw 1 Required information [The following information applies to the questions displayed below.] Martinez Company's relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 units, its average costs per unit are as follows: Direct materials Direct labor 2 Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense 13. If the selling price is $23.00 per unit, what is the contribution margin per unit? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Contribution margin per unit W S X H 7,616 ommand A 3 #3 E D C $ 4 R FL < Prev % 5 V Average Cost per Unit $7.00 $4.50 $ 1.40 $ 4.00 $ 4.00 $ 2.10 $ 1.10 $ 0.55 T 13 G S 14 15 6 tv Y B of 15 & 7 H U N Next A 9 +00 8 J H p 1 2023-01...0.40 PM 2023-01..2.52 PM 2022-12...6.45 A ( 9 A O ( M K He ) -C O 0 < L H P command { [ 0arrow_forward15 es [The following information applies to the questions displayed below.] Diego Company manufactures one product that is sold for $77 per unit in two geographic regions-East and West. The following information pertains to the company's first year of operations in which it produced 59,000 units and sold 54,000 units. Variable costs per unit: Manufacturing: Direct materials. Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expense $27 $ 10 $2 $3 The company sold 41,000 units in the East region and 13,000 units in the West region. It determined that $330,000 of its fixed selling and administrative expense is traceable to the West region, $280,000 is traceable to the East region, and the remaining $52,000 is a common fixed expense. The company will continue to incur the total amount of its fixed manufacturing overhead costs as long as it continues to produce any amount of…arrow_forwardChapter 6: A Closer Look on Cost Accounting The company makes 2,350 units of product X a year, requiring a total os 3.300 machine hours, 250 orders and 200 inspection hours per year. The product's direct material cost is P201.50 and its direct labor cost in P211.11 per unit. The product sells for P590 per unit. According to the activity-based costing system, the gross margin for product X is? 423,087.50 b. 350,435.50 c. 416,890 d. None of the choice a. 56. The following information is available for Mary Corp. Activity Pool Setups Quality Inspections Assembly (direct labor hour) What is the activity rate for setups? Activity Base 50,000 120,000 400,000 Budgeted Amount 300,000 600,000 2,000,000 a. P5.09 c. РО.75 d. P58.00 b. Рб.00 The activity rate for quality inspection is: с. Рб.00 d. P5.09 a. P5.29 b. P5.00arrow_forward
- of 15 ▪ Book Print References Mc Graw Hill Required information [The following information applies to the questions displayed below.] Diego Company manufactures one product that is sold for $75 per unit in two geographic regions-the East and West regions. The following information pertains to the company's first year of operations in which it produced 46,000 units and sold 42,000 units. Variable costs per unit: Manufacturing: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expense a. What is the company's break-even point in unit sales? The company sold 31,000 units in the East region and 11,000 units in the West region. It determined that $200,000 of its fixed selling and administrative expense is traceable to the West region, $150,000 is traceable to the East region, and the remaining $38,000 is a common fixed expense. The company will continue to…arrow_forwardQuestion 4 Achimota Ltd produces a single product and has the following financial information: Selling Price Cost per unit: Direct Materials Direct Labour Variable Overheads GH¢ 50 15 14 4 Fixed manufacturing overheads are GH¢40,000 per month, production volume is 10,000 units per month and sales is 9,200 units. You are required to: a) Calculate the cost per unit under: i. Absorption costing ii. Marginal costing b) Prepare the income statement of ABC Ltd under: i. Absorption costing technique ii. Marginal costing technique c) Reconcile the profits obtained under (bi) and (bii) d) Explain the reasons for the difference in profits in (c) above.arrow_forwardvj subject-Accounting Hanks recently produced & sold 2777 units. Fixed costs per unit at this level of activity amounted to $8; variable costs per unit were $9. How much total cost would the company anticipate if during the next period it produced & sold 6919 units? Note: assume this level is still within the relevant range Round your final answer to 2 decimal placesarrow_forward
- Problem 6-18 (Algo) Variable and Absorption Costing Unit Product Costs and Income Statements [LO6-1, LO6-2] Haas Company manufactures and sells one product. The following information pertains to each of the company’s first three years of operations: Variable costs per unit: Manufacturing: Direct materials $ 24 Direct labor $ 16 Variable manufacturing overhead $ 4 Variable selling and administrative $ 1 Fixed costs per year: Fixed manufacturing overhead $ 220,000 Fixed selling and administrative expenses $ 140,000 During its first year of operations, Haas produced 40,000 units and sold 40,000 units. During its second year of operations, it produced 55,000 units and sold 30,000 units. In its third year, Haas produced 20,000 units and sold 45,000 units. The selling price of the company’s product is $54 per unit. Required: b. Prepare an income statement for Year 1, Year 2, and Year 3.arrow_forwarder 1 Assignment i Required information [The following information applies to the questions displayed below.] Martinez Company's relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 units, its average costs per unit are as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense Average fixed manufacturing cost per unit 7. If 8,000 units are produced, what is the average fixed manufacturing cost per unit produced? Next W Helparrow_forwardces Ас Graw Hill ! Q A Required information [The following information applies to the questions displayed below.] Martinez Company's relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 units, its average costs per unit are as follows: Direct materials Direct labor N Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense 7. If 8,000 units are produced, what is the average fixed manufacturing cost per unit produced? Average fixed manufacturing cost per unit @ 2 W S #3 X 2.2 E D $ 4 8 B N J 2023-01...0.40 PM 2023-01...2.52 PM 2022-12 A 1 ( ( 9 * K M ) 0 O 3 P commarrow_forward
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