Super-Variable Costing Income Statement LO4â€”6 Zola Company manufactures and sells one product. The following information pertains to the company’s first year of operations: The company does not incur any variable manufacturing overhead costs or variable selling and administrative expenses. During its first year of operations, Zola produced 25,000 units and sold 20,000 units. The selling price of the company’s product is $50 per unit. Required: Assume the company uses super-variable costing: Compute the unit product cost for the year. Prepare an income statement for the year.

Question

Want to see more full solutions like this?

Answer 1

Textbook Question

Chapter 5A, Problem 5A.1E

Super-Variable Costing Income Statement LO4â€”6

Zola Company manufactures and sells one product. The following information pertains to the company’s first year of operations:

Chapter 5A, Problem 5A.1E, Super-Variable Costing Income Statement LO4â€”6 Zola Company manufactures and sells one product. The

The company does not incur any variable manufacturing overhead costs or variable selling and administrative expenses. During its first year of operations, Zola produced 25,000 units and sold 20,000 units. The selling price of the company’s product is $50 per unit.

Required:

Assume the company uses super-variable costing:

Compute the unit product cost for the year.
Prepare an income statement for the year.

Expert Solution & Answer

To determine

Concept introduction:

Income statement:

The income statement tells about the revenues earned and expenses incurred by the company in a specific period of time. It is also known as operations statement, earnings statement, revenue statement or profit, and loss statement.

Calculate the unit product cost.
Prepare an income statement for the given year.

Answer to Problem 5A.1E

The unit product cost is $18.
The income statement of Company Z is as follows:

Company Z
Income Statement
Particulars	Amount (Unit)(a)	Units(b)	Total amount(c = a × b)
Sales	$50	20000	$1,000,000
Less: Variable cost	($18)	20000	($360,000)
Contribution margin (a)			$640,000
Less: Fixed costs
Direct labor			$200,000
Fixed manufacturing cost			$250,000
Fixed selling and administration expenses			$80,000
Total fixed costs (b)			$530,000
Net operating income (c = a -b)			$110,000

Table: (1)

Explanation of Solution

(a)

Calculate the unit product cost:

The company uses the variable costing method. Under the variable costing method, the variable cost is considered as the product cost. In the given case, the variable cost of the product is $18.

Thus, the unit product cost is $18.

(b)

Prepare an income statement for the given year:

Company Z
Income Statement
Particulars	Amount (Unit)(a)	Units(b)	Total amount(c = a × b)
Sales	$50	20000	$1,000,000
Less: Variable cost	($18)	20000	($360,000)
Contribution margin (a)			$640,000
Less: Fixed costs
Direct labor			$200,000
Fixed manufacturing cost			$250,000
Fixed selling and administration expenses			$80,000
Total fixed costs (b)			$530,000
Net operating income (c = a -b)			$110,000

Table: (2)

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

ch7q39 Units Sold to Break Even, Unit Variable Cost, Unit Manufacturing Cost, Units to Earn Target Income Werner Company produces and sells disposable foil baking pans to retailers for $2.95 per pan. The variable cost per pan is as follows: Direct materials $0.22 Direct labor 0.56 Variable factory overhead 0.70 Variable selling expense 0.13 Fixed manufacturing cost totals $303,290 per year. Administrative cost (all fixed) totals $41,358. Required: 1. Compute the number of pans that must be sold for Werner to break even. pans 2. Conceptual Connection: What is the unit variable cost? What is the unit variable manufacturing cost? Round your answers to the nearest cent. Unit variable cost $ Unit variable manufacturing cost $ Which is used in cost-volume-profit analysis?Unit variable cost 3. How many pans must be sold for Werner to earn operating income of $11,524? pans 4. How much sales revenue must Werner have to earn operating income 11524$

Q6 – B Hambar Co. has a unit selling price of $800, variable costs per unit of $520 and fixed costs of $420,000. The company’s sales units are 600,000 for this year. Instructions: a) Determine the contribution margin per unit. b) Using the contribution margin technique, compute the break-even point in units.

EB5. 2.2 Baxter Company has a relevant range of production between 15,000 and 30,000 units. The following cost data represents average variable costs per unit for 25,000 units of production. Using the costs data from Rose Company, answer the following questions: Average Cost per Unit DM 10 DL 9 Indirect Materials 3 Fixed MOH 6 Variable MOH 2 Fixed S&A Expense 8 Variable Sales Commission 14 A. If 15,000 units are produced, what is the variable cost per unit? B. If 28,000 units are produced, what is the variable cost per unit? C. If 21,000 units are produced, what are the total variable costs? D. If 29,000 units are produced, what are the total variable costs? E. If 17,000 units are produced, what are the total manufacturing overhead costs incurred? F. If 23,000 units are produced, what are the total manufacturing overhead costs incurred? G. If 30,000 units are produced, what are the per unit…

Answer 2

Textbook Question

Chapter 5A, Problem 5A.1E

Super-Variable Costing Income Statement LO4â€”6

Zola Company manufactures and sells one product. The following information pertains to the company’s first year of operations:

Chapter 5A, Problem 5A.1E, Super-Variable Costing Income Statement LO4â€”6 Zola Company manufactures and sells one product. The

The company does not incur any variable manufacturing overhead costs or variable selling and administrative expenses. During its first year of operations, Zola produced 25,000 units and sold 20,000 units. The selling price of the company’s product is $50 per unit.

Required:

Assume the company uses super-variable costing:

Compute the unit product cost for the year.
Prepare an income statement for the year.

Expert Solution & Answer

To determine

Concept introduction:

Income statement:

The income statement tells about the revenues earned and expenses incurred by the company in a specific period of time. It is also known as operations statement, earnings statement, revenue statement or profit, and loss statement.

Calculate the unit product cost.
Prepare an income statement for the given year.

Answer to Problem 5A.1E

The unit product cost is $18.
The income statement of Company Z is as follows:

Company Z
Income Statement
Particulars	Amount (Unit)(a)	Units(b)	Total amount(c = a × b)
Sales	$50	20000	$1,000,000
Less: Variable cost	($18)	20000	($360,000)
Contribution margin (a)			$640,000
Less: Fixed costs
Direct labor			$200,000
Fixed manufacturing cost			$250,000
Fixed selling and administration expenses			$80,000
Total fixed costs (b)			$530,000
Net operating income (c = a -b)			$110,000

Table: (1)

Explanation of Solution

(a)

Calculate the unit product cost:

The company uses the variable costing method. Under the variable costing method, the variable cost is considered as the product cost. In the given case, the variable cost of the product is $18.

Thus, the unit product cost is $18.

(b)

Prepare an income statement for the given year:

Company Z
Income Statement
Particulars	Amount (Unit)(a)	Units(b)	Total amount(c = a × b)
Sales	$50	20000	$1,000,000
Less: Variable cost	($18)	20000	($360,000)
Contribution margin (a)			$640,000
Less: Fixed costs
Direct labor			$200,000
Fixed manufacturing cost			$250,000
Fixed selling and administration expenses			$80,000
Total fixed costs (b)			$530,000
Net operating income (c = a -b)			$110,000

Table: (2)

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Textbook Question

Chapter 5A, Problem 5A.1E

Super-Variable Costing Income Statement LO4â€”6

Zola Company manufactures and sells one product. The following information pertains to the company’s first year of operations:

Chapter 5A, Problem 5A.1E, Super-Variable Costing Income Statement LO4â€”6 Zola Company manufactures and sells one product. The

The company does not incur any variable manufacturing overhead costs or variable selling and administrative expenses. During its first year of operations, Zola produced 25,000 units and sold 20,000 units. The selling price of the company’s product is $50 per unit.

Required:

Assume the company uses super-variable costing:

Compute the unit product cost for the year.
Prepare an income statement for the year.

Expert Solution & Answer

To determine

Concept introduction:

Income statement:

The income statement tells about the revenues earned and expenses incurred by the company in a specific period of time. It is also known as operations statement, earnings statement, revenue statement or profit, and loss statement.

Calculate the unit product cost.
Prepare an income statement for the given year.

Answer to Problem 5A.1E

The unit product cost is $18.
The income statement of Company Z is as follows:

Company Z
Income Statement
Particulars	Amount (Unit)(a)	Units(b)	Total amount(c = a × b)
Sales	$50	20000	$1,000,000
Less: Variable cost	($18)	20000	($360,000)
Contribution margin (a)			$640,000
Less: Fixed costs
Direct labor			$200,000
Fixed manufacturing cost			$250,000
Fixed selling and administration expenses			$80,000
Total fixed costs (b)			$530,000
Net operating income (c = a -b)			$110,000

Table: (1)

Explanation of Solution

(a)

Calculate the unit product cost:

The company uses the variable costing method. Under the variable costing method, the variable cost is considered as the product cost. In the given case, the variable cost of the product is $18.

Thus, the unit product cost is $18.

(b)

Prepare an income statement for the given year:

Company Z
Income Statement
Particulars	Amount (Unit)(a)	Units(b)	Total amount(c = a × b)
Sales	$50	20000	$1,000,000
Less: Variable cost	($18)	20000	($360,000)
Contribution margin (a)			$640,000
Less: Fixed costs
Direct labor			$200,000
Fixed manufacturing cost			$250,000
Fixed selling and administration expenses			$80,000
Total fixed costs (b)			$530,000
Net operating income (c = a -b)			$110,000

Table: (2)

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Textbook Question

Chapter 5A, Problem 5A.1E

Super-Variable Costing Income Statement LO4â€”6

Zola Company manufactures and sells one product. The following information pertains to the company’s first year of operations:

Chapter 5A, Problem 5A.1E, Super-Variable Costing Income Statement LO4â€”6 Zola Company manufactures and sells one product. The

The company does not incur any variable manufacturing overhead costs or variable selling and administrative expenses. During its first year of operations, Zola produced 25,000 units and sold 20,000 units. The selling price of the company’s product is $50 per unit.

Required:

Assume the company uses super-variable costing:

Compute the unit product cost for the year.
Prepare an income statement for the year.

Expert Solution & Answer

To determine

Concept introduction:

Income statement:

The income statement tells about the revenues earned and expenses incurred by the company in a specific period of time. It is also known as operations statement, earnings statement, revenue statement or profit, and loss statement.

Calculate the unit product cost.
Prepare an income statement for the given year.

Answer to Problem 5A.1E

The unit product cost is $18.
The income statement of Company Z is as follows:

Company Z
Income Statement
Particulars	Amount (Unit)(a)	Units(b)	Total amount(c = a × b)
Sales	$50	20000	$1,000,000
Less: Variable cost	($18)	20000	($360,000)
Contribution margin (a)			$640,000
Less: Fixed costs
Direct labor			$200,000
Fixed manufacturing cost			$250,000
Fixed selling and administration expenses			$80,000
Total fixed costs (b)			$530,000
Net operating income (c = a -b)			$110,000

Table: (1)

Explanation of Solution

(a)

Calculate the unit product cost:

The company uses the variable costing method. Under the variable costing method, the variable cost is considered as the product cost. In the given case, the variable cost of the product is $18.

Thus, the unit product cost is $18.

(b)

Prepare an income statement for the given year:

Company Z
Income Statement
Particulars	Amount (Unit)(a)	Units(b)	Total amount(c = a × b)
Sales	$50	20000	$1,000,000
Less: Variable cost	($18)	20000	($360,000)
Contribution margin (a)			$640,000
Less: Fixed costs
Direct labor			$200,000
Fixed manufacturing cost			$250,000
Fixed selling and administration expenses			$80,000
Total fixed costs (b)			$530,000
Net operating income (c = a -b)			$110,000

Table: (2)

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Textbook Question

Answer 6

Textbook Question

Answer 7

Expert Solution & Answer

To determine

Concept introduction:

Income statement:

The income statement tells about the revenues earned and expenses incurred by the company in a specific period of time. It is also known as operations statement, earnings statement, revenue statement or profit, and loss statement.

Calculate the unit product cost.
Prepare an income statement for the given year.

Answer to Problem 5A.1E

The unit product cost is $18.
The income statement of Company Z is as follows:

Company Z
Income Statement
Particulars	Amount (Unit)(a)	Units(b)	Total amount(c = a × b)
Sales	$50	20000	$1,000,000
Less: Variable cost	($18)	20000	($360,000)
Contribution margin (a)			$640,000
Less: Fixed costs
Direct labor			$200,000
Fixed manufacturing cost			$250,000
Fixed selling and administration expenses			$80,000
Total fixed costs (b)			$530,000
Net operating income (c = a -b)			$110,000

Table: (1)

Explanation of Solution

(a)

Calculate the unit product cost:

The company uses the variable costing method. Under the variable costing method, the variable cost is considered as the product cost. In the given case, the variable cost of the product is $18.

Thus, the unit product cost is $18.

(b)

Prepare an income statement for the given year:

Company Z
Income Statement
Particulars	Amount (Unit)(a)	Units(b)	Total amount(c = a × b)
Sales	$50	20000	$1,000,000
Less: Variable cost	($18)	20000	($360,000)
Contribution margin (a)			$640,000
Less: Fixed costs
Direct labor			$200,000
Fixed manufacturing cost			$250,000
Fixed selling and administration expenses			$80,000
Total fixed costs (b)			$530,000
Net operating income (c = a -b)			$110,000

Table: (2)

Answer 8

Expert Solution & Answer

To determine

Concept introduction:

Income statement:

The income statement tells about the revenues earned and expenses incurred by the company in a specific period of time. It is also known as operations statement, earnings statement, revenue statement or profit, and loss statement.

Calculate the unit product cost.
Prepare an income statement for the given year.

Answer to Problem 5A.1E

The unit product cost is $18.
The income statement of Company Z is as follows:

Company Z
Income Statement
Particulars	Amount (Unit)(a)	Units(b)	Total amount(c = a × b)
Sales	$50	20000	$1,000,000
Less: Variable cost	($18)	20000	($360,000)
Contribution margin (a)			$640,000
Less: Fixed costs
Direct labor			$200,000
Fixed manufacturing cost			$250,000
Fixed selling and administration expenses			$80,000
Total fixed costs (b)			$530,000
Net operating income (c = a -b)			$110,000

Table: (1)

Explanation of Solution

(a)

Calculate the unit product cost:

The company uses the variable costing method. Under the variable costing method, the variable cost is considered as the product cost. In the given case, the variable cost of the product is $18.

Thus, the unit product cost is $18.

(b)

Prepare an income statement for the given year:

Company Z
Income Statement
Particulars	Amount (Unit)(a)	Units(b)	Total amount(c = a × b)
Sales	$50	20000	$1,000,000
Less: Variable cost	($18)	20000	($360,000)
Contribution margin (a)			$640,000
Less: Fixed costs
Direct labor			$200,000
Fixed manufacturing cost			$250,000
Fixed selling and administration expenses			$80,000
Total fixed costs (b)			$530,000
Net operating income (c = a -b)			$110,000

Table: (2)

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

To determine

Concept introduction:

Income statement:

The income statement tells about the revenues earned and expenses incurred by the company in a specific period of time. It is also known as operations statement, earnings statement, revenue statement or profit, and loss statement.

Calculate the unit product cost.
Prepare an income statement for the given year.

Answer 12

Answer to Problem 5A.1E

The unit product cost is $18.
The income statement of Company Z is as follows:

Company Z
Income Statement
Particulars	Amount (Unit)(a)	Units(b)	Total amount(c = a × b)
Sales	$50	20000	$1,000,000
Less: Variable cost	($18)	20000	($360,000)
Contribution margin (a)			$640,000
Less: Fixed costs
Direct labor			$200,000
Fixed manufacturing cost			$250,000
Fixed selling and administration expenses			$80,000
Total fixed costs (b)			$530,000
Net operating income (c = a -b)			$110,000

Table: (1)

Answer 13

Explanation of Solution

(a)

Calculate the unit product cost:

The company uses the variable costing method. Under the variable costing method, the variable cost is considered as the product cost. In the given case, the variable cost of the product is $18.

Thus, the unit product cost is $18.

(b)

Prepare an income statement for the given year:

Company Z
Income Statement
Particulars	Amount (Unit)(a)	Units(b)	Total amount(c = a × b)
Sales	$50	20000	$1,000,000
Less: Variable cost	($18)	20000	($360,000)
Contribution margin (a)			$640,000
Less: Fixed costs
Direct labor			$200,000
Fixed manufacturing cost			$250,000
Fixed selling and administration expenses			$80,000
Total fixed costs (b)			$530,000
Net operating income (c = a -b)			$110,000

Table: (2)

Answer 14

Ch. 5A - Super-Variable Costing Income Statement LO4â€”6...Ch. 5A - Super-Variable Costing and Variable Costing Unit...Ch. 5A - Super-Variable Costing and Variable Costing Unit...Ch. 5A - Super-Variable Costing, Variable Costing, and...

Concept explainers

Videos

Answer to Problem 5A.1E

Explanation of Solution

Want to see more full solutions like this?

Chapter 5A Solutions