Bracey Company manufactures and sells one product. The following information pertains to the company's first year of operations: Variable cost per unit: Direct materials Fixed costs per year: Direct labor $ 32 $ 450,500 Fixed manufacturing overhead Fixed selling and administrative expenses $ 431,950 $ 74,000 The company does not incur any variable manufacturing overhead costs or variable selling and administrative expenses. During its first year of operations, Bracey produced 26,500 units and sold 24,300 units. The selling price of the company's product is $72 per unit. Required: 1. Assume the company uses super-variable costing: a. Compute the unit product cost for the year. b. Prepare an income statement for the year. 2. Assume the company uses a variable costing system that assigns $17.00 of direct labor cost to each unit produced: a. Compute the unit product cost for the year. b. Prepare an income statement for the year. 3. Assume the company uses an absorption costing system that assigns $17.00 of direct labor cost and $16.30 of fixed manufacturing overhead cost to each unit produced: a. Compute the unit product cost for the year. b. Prepare an income statement for the year. 4. a. Reconcile the difference between the super-variable costing and variable costing net operating incomes. b. Reconcile the difference between the super-variable costing and absorption costing net operating incomes.
Bracey Company manufactures and sells one product. The following information pertains to the company's first year of operations: Variable cost per unit: Direct materials Fixed costs per year: Direct labor $ 32 $ 450,500 Fixed manufacturing overhead Fixed selling and administrative expenses $ 431,950 $ 74,000 The company does not incur any variable manufacturing overhead costs or variable selling and administrative expenses. During its first year of operations, Bracey produced 26,500 units and sold 24,300 units. The selling price of the company's product is $72 per unit. Required: 1. Assume the company uses super-variable costing: a. Compute the unit product cost for the year. b. Prepare an income statement for the year. 2. Assume the company uses a variable costing system that assigns $17.00 of direct labor cost to each unit produced: a. Compute the unit product cost for the year. b. Prepare an income statement for the year. 3. Assume the company uses an absorption costing system that assigns $17.00 of direct labor cost and $16.30 of fixed manufacturing overhead cost to each unit produced: a. Compute the unit product cost for the year. b. Prepare an income statement for the year. 4. a. Reconcile the difference between the super-variable costing and variable costing net operating incomes. b. Reconcile the difference between the super-variable costing and absorption costing net operating incomes.
Chapter5: Process Costing
Section: Chapter Questions
Problem 2PB: The following product costs are available for Kellee Company on the production of eyeglass frames:...
Related questions
Question
Transcribed Image Text:Bracey Company manufactures and sells one product. The following information pertains to the company's first year of
operations:
Variable cost per unit:
Direct materials
Fixed costs per year:
Direct labor
$ 32
$ 450,500
Fixed manufacturing overhead
Fixed selling and administrative expenses
$ 431,950
$ 74,000
The company does not incur any variable manufacturing overhead costs or variable selling and administrative expenses.
During its first year of operations, Bracey produced 26,500 units and sold 24,300 units. The selling price of the company's
product is $72 per unit.
Required:
1. Assume the company uses super-variable costing:
a. Compute the unit product cost for the year.
b. Prepare an income statement for the year.
2. Assume the company uses a variable costing system that assigns $17.00 of direct labor cost to each unit produced:
a. Compute the unit product cost for the year.
b. Prepare an income statement for the year.
3. Assume the company uses an absorption costing system that assigns $17.00 of direct labor cost and $16.30 of fixed
manufacturing overhead cost to each unit produced:
a. Compute the unit product cost for the year.
b. Prepare an income statement for the year.
4. a. Reconcile the difference between the super-variable costing and variable costing net operating incomes.
b. Reconcile the difference between the super-variable costing and absorption costing net operating incomes.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 4 images
Recommended textbooks for you
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub