ACC 212 Lecture Notes - Lecture 9: Earnings Before Interest And Taxes, Total Absorption Costing, Data Structure
43 views2 pages
2 Nov 2017
School
Department
Course
Professor
Get access
Grade+20% off
$8 USD/m$10 USD/m
Billed $96 USD annually
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
40 Verified Answers
Class+
$8 USD/m
Billed $96 USD annually
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
30 Verified Answers
Related Documents
Related Questions
Denton Company manufactures and sells a single product. Cost data for the product are given:
Variable costs per unit: | ||||
Direct materials | $ | 3 | ||
Direct labor | 10 | |||
Variable manufacturing overhead | 3 | |||
Variable selling and administrative | 1 | |||
Total variable cost per unit | $ | 17 | ||
Fixed costs per month: | ||||
Fixed manufacturing overhead | $ | 63,000 | ||
Fixed selling and administrative | 160,000 | |||
Total fixed cost per month | $ | 223,000 | ||
The product sells for $46 per unit. Production and sales data for July and August, the first two months of operations, follow:
Units Produced | Units Sold | |
July | 21,000 | 17,000 |
August | 21,000 | 25,000 |
The companyâs Accounting Department has prepared the following absorption costing income statements for July and August:
July | August | ||||
Sales | $ | 782,000 | $ | 1,150,000 | |
Cost of goods sold | 323,000 | 475,000 | |||
Gross margin | 459,000 | 675,000 | |||
Selling and administrative expenses | 177,000 | 185,000 | |||
Net operating income | $ | 282,000 | $ | 490,000 | |
Required:
1. Determine the unit product cost under:
a. Absorption costing.
b. Variable costing.
2. Prepare contribution format variable costing income statements for July and August.
3. Reconcile the variable costing and absorption costing net operating incomes.