MANAGERIAL ACCOUNTING
16th Edition
ISBN: 9781260936322
Author: Garrison
Publisher: MCG
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Textbook Question
Chapter 6, Problem 2AE
| A | B | C | D | E | |
| 1 | Chapter 6: Applying Excel | ||||
| 2 | |||||
| 3 | Data | ||||
| 4 | Selling price per unit | $50 | |||
| 5 | |||||
| 6 | Variable per unit produced | ||||
| 7 | Direct materials | $11 | |||
| 8 | Direct labour | $6 | |||
| 9 | Variable manufacturing |
$6 | |||
| 10 | Fixed manufacturing overhead per year | $120,000 | |||
| 11 | Selling and administrative expenses | ||||
| 12 | Variable per unit sold | $4 | |||
| 13 | Fixed per year | $70 000 | |||
| 14 | |||||
| 15 | Year 1 | Year 2 | |||
| 16 | Units in beginning inventory | 0 | ? | ||
| 17 | Units produced doing the year | 10 000 | 6 000 | ||
| 18 | Units sold doing the year | 8 000 | 8 000 | ||
| 19 | |||||
| 20 | Enter a formula into each of the cells marked with a ? below |
||||
| 21 | Review Problem 1: Contrasting Variable and Absorption Costing | ||||
| 22 | |||||
| 23 | Compute the Ending Inventory | ||||
| 24 | Year 1 | Year 2 | |||
| 25 | Units in beginning inventory | 0 | ? | ||
| 26 | Units produced doing the year | ? | ? | ||
| 27 | Units sold doing the year | ? | ? | ||
| 28 | Units in ending inventory | ? | ? | ||
| 29 | |||||
| 30 | Compute the Absorption Costing Unit Product Cost | ||||
| 31 | Year 1 | Year 2 | |||
| 32 | Direct materials | ? | ? | ||
| 33 | Direct labour | ? | ? | ||
| 34 | Variable manufacturing overhead | ? | ? | ||
| 35 | Fixed manufacturing overhead | ? |
? |
||
| 36 | Absorption costing unit product cost | ? | ? | ||
| 37 | |||||
| 38 | Construct the Absorption Costing Income Statement | ||||
| 39 | Year 1 | Year 2 | |||
| 40 | Sales | ? | ? | ||
| 41 | Cost of goods sold | ? | ? | ||
| 42 | Gross margin | ? | ? | ||
| 43 | Selling and administrative expenses | ? |
? |
||
| 44 | Net operating income | ? | ? | ||
| 45 | |||||
| 46 | Compute the Variable Costing Unit Product Cost | ||||
| 47 | Year 1 | Year 2 | |||
| 48 | Direct materials | ? | ? | ||
| 49 | Direct labour | ? | ? | ||
| 50 | Variable manufacturing overhead | ? |
? |
||
| 51 | Variable costing unit product cost | ? | ? | ||
| 52 | |||||
| 53 | Construct the Variable Costing Income Statement | ||||
| 54 | Year 1 | Year 2 | |||
| 55 | Sales | ? | ? | ||
| 56 | Variable expenses | ||||
| 57 | Variable cost of goods sold | ? | ? | ||
| 58 | Variable selling and administrative expenses | ? |
? |
? |
? |
| 59 | Contribution margin | ? | ? | ||
| 60 | Fixed expenses | ||||
| 61 | Fixed manufacturing overhead | ? | ? | ||
| 62 | Fixed selling and administrative expenses | ? |
? |
? |
? |
| 63 | Net operating income | ? | ? |
2. Enter the following data from a different company into your worksheet:
| Data | |||
| Selling price per unit | $75 | ||
| Manufacturing costs: | |||
| Variable per unit produced: | |||
| Direct materials | $12 | ||
| Direct labor | $5 | ||
| Variable manufacturing overhead | $7 | ||
| Fixed manufacturing overhead per year | $150,000 | ||
| Selling and administrative expenses: | |||
| Variable per unit sold | $1 | ||
| Fixed per year | $60,000 | ||
| Year 1 | Year 2 | ||
| Units in beginning inventory | 0 | ||
| Units produced during the year | 15,000 | 10,000 | |
| Units sold during the year | 12,000 | 12,000 | |
Is the net operating income under variable costing different in Year 1 and Year 2? Why or why not? Explain the relation between the net operating income under absorption costing and variable costing in Year 1. Explain the relation between the net operating income under absorption costing and variable costing in Year 2.
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Q.no.1
The Dorset Corporation produces and sells a single product. The following data refer to the year just completed:
Beginning inventory
0
Units produced
9,000
Units sold
7,000
Selling price per unit
$
47
Selling and administrative expenses:
Variable per unit
$
4
Fixed per year
$
58,000
Manufacturing costs:
Direct materials cost per unit
$
10
Direct labor cost per unit
$
6
Variable manufacturing overhead cost per unit
$
5
Fixed manufacturing overhead per year
$
90,000
Assume that direct labor is a variable cost.
Required:
a) Prepare an income statement for the year using absorption costing
b) Prepare an income statement for the year using variable costing
c) Reconcile the absorption costing and variable costing net operating income figures
Question
Q1Moona Inc. produces Mobile phones. Information of the company's operations last year appear below:
Fixed cost:Fixed Manufacturing overhead Rs 40,000Fixed Selling & Administrative Rs 60,000Selling Price per unit Rs 100Variable cost per unit:Direct Materials Rs 30Direct labor Rs 10Variable Manufacturing overhead Rs 5Variable Selling & Administrative Rs 2Units In beginning Inventory 0Units Produced 2000Units Sold 1900
Required:
a. Compute the unit product cost under both absorption and variable costing.b. Prepare an income statement for the year using absorption costing.c. Prepare a contribution format income statement for the year using variable costing.
d. Prepare a report reconciling the difference in net operating income between absorption and variable costing for the year.
Problem 1. (40%) The EG Company produces and sells one product. The following data refer to the year just completed:Units in beginning inventory ..........................0Units produced................................................8,900Units sold........................................................8,500Units in ending inventory ...............................400Variable costs per unit:Direct materials ...........................................$26Direct labor..................................................$25Variable manufacturing overhead ...............$4Variable selling and administrative expense.................................................................$4Fixed costs:Fixed manufacturing overhead ....................$249,200Fixed selling and administrative expense....$17,000Sales Price is $100 per unit.Required:
b. Prepare an income statement for the year using absorption costing.c. Prepare a contribution format income statement for the year using variable costing.d.…
Chapter 6 Solutions
MANAGERIAL ACCOUNTING
Ch. 6.A - Prob. 1ECh. 6.A - EXERCISE 6A-2 Super-Variable Costing and Variable...Ch. 6.A - Prob. 3ECh. 6.A - PROBLEM 6A-4 Super-Variable Costing and Variable...Ch. 6.A - Prob. 5PCh. 6 - Prob. 1QCh. 6 - Are selling and administrative expenses treated as...Ch. 6 - Explain how fixed manufacturing overhead costs are...Ch. 6 - What are the arguments in favor of treating fixed...Ch. 6 - What are the arguments in favor of treating fixed...
Ch. 6 - Prob. 6QCh. 6 - Prob. 7QCh. 6 - Prob. 8QCh. 6 - Under absorption costing, how is it possible to...Ch. 6 - Prob. 10QCh. 6 - Prob. 11QCh. 6 - What costs are assigned to a segment under the...Ch. 6 - Distinguish between a trace able fixed cost and a...Ch. 6 - Explain how the contribution margin differs from...Ch. 6 - Prob. 15QCh. 6 - Prob. 16QCh. 6 - Should a company allocate its common feed costs to...Ch. 6 - A B C D E 1 Chapter 6: Applying Excel 2 3 Data 4...Ch. 6 - A B C D E 1 Chapter 6: Applying Excel 2 3 Data 4...Ch. 6 - A B C D E
1 Chapter 6: Applying...Ch. 6 - Diego Company manufactures one product that is...Ch. 6 - Prob. 2F15Ch. 6 - Prob. 3F15Ch. 6 - Prob. 4F15Ch. 6 - Prob. 5F15Ch. 6 - Diego Company manufactures one product that is...Ch. 6 - Prob. 7F15Ch. 6 - Prob. 8F15Ch. 6 - Prob. 9F15Ch. 6 - Prob. 10F15Ch. 6 - Prob. 11F15Ch. 6 - Prob. 12F15Ch. 6 - Prob. 13F15Ch. 6 - Diego Company manufactures one product that is...Ch. 6 - Prob. 15F15Ch. 6 - Prob. 1ECh. 6 - Prob. 2ECh. 6 - Prob. 3ECh. 6 - Prob. 4ECh. 6 - Prob. 5ECh. 6 - EXERCISE 6-6 Variable and Absorption Costing Unit...Ch. 6 - Prob. 7ECh. 6 - Prob. 8ECh. 6 - EXERCISE 6-9 Variable and Absorption Costing Unit...Ch. 6 - Prob. 10ECh. 6 - Prob. 11ECh. 6 - Prob. 12ECh. 6 - Prob. 13ECh. 6 - Prob. 14ECh. 6 - EXERCISE 6—15 Absorption Costing Unit Product Cost...Ch. 6 - EXERCISE 6-16 Working with a Segmented Income...Ch. 6 - Prob. 17ECh. 6 - Prob. 18PCh. 6 - Prob. 19PCh. 6 - Prob. 20PCh. 6 - PROBLEM 6—21 Segment Reporting and Decision-Making...Ch. 6 - Prob. 22PCh. 6 - Prob. 23PCh. 6 - PROBLEM 6-24 Companywide and Segment Break-Even...Ch. 6 - Prob. 25PCh. 6 - Prob. 26PCh. 6 - PROBLEM 6-27 Incentives Created by Absorption...Ch. 6 - Prob. 28PCh. 6 - Prob. 29CCh. 6 - Prob. 30C
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