ACCT 2020 Lecture Notes - Lecture 3: Earnings Before Interest And Taxes, Income Statement
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Brock Company produces and sells an industrial product. Thecompany has just opened a new plant to manufacture the product, andthe following cost and revenue data have been provided for thefirst month of the plant’s operation.
Beginning inventory | 0 | |
Units produced | 46,000 | |
Units sold | 41,000 | |
Selling price per unit | $ | 80 |
Selling and administrative expenses: | ||
Variable per unit | $ | 4 |
Fixed (total) | $ | 563,000 |
Manufacturing costs | ||
Direct materials cost per unit | $ | 17 |
Direct labor cost per unit | $ | 6 |
Variable manufacturing overhead cost perunit | $ | 3 |
Fixed manufacturing overhead cost(total) | $ | 874,000 |
Required: |
1. | Assume that thecompany uses absorption costing. |
a. | Determine theunit product cost. |
Unitproduct cost | $ |
b. | Prepare an income statement for the month. (Input allamounts as positive values except losses which should be indicatedby a minus sign.) |
Absorption Costing Income Statement | |
(Click to select)Selling and administrativeexpensesSalesGross marginCost of goods manufacturedNet operatingincome (loss) | $ |
(Click to select)SalesNet operating income (loss)Costof goods soldSelling and administrative expensesGross margin | |
(Click to select)Contribution marginGross margin | |
(Click to select)Gross marginNet operating income(loss)Selling and administrative expensesSalesCost of goodssold | |
(Click to select)Net operating lossNet operatingincome | $ |
2. | Assume that thecompany uses variable costing. |
a. | Determine theunit product cost. |
Unitproduct cost | $ |
b. | Prepare a contribution format income statement for the month.(Input all amounts as positive values except losses whichshould be indicated by a minus sign.) |
Variable Costing Income Statement | ||
(Click to select)Variable cost of goods soldVariableselling and administrative expensesContribution marginFixedmanufacturing overheadFixed selling and administrative expensesNetoperating income (loss)Sales | $ | |
Variable expenses: | ||
(Click to select)Netoperating income (loss)Fixed manufacturing overheadSalesVariableselling and administrative expensesVariable cost of goodssoldContribution marginFixed selling and administrativeexpenses | $ | |
(Click to select)Fixedmanufacturing overheadVariable cost of goods soldVariable sellingand administrative expensesFixed selling and administrativeexpensesSalesNet operating income (loss)Contribution margin | ||
(Click to select)Gross marginContribution margin | ||
Fixed expenses: | ||
(Click to select)Fixedselling and administrative expensesNet operating income(loss)Contribution marginVariable selling and administrativeexpensesSalesFixed manufacturing overheadVariable cost of goodssold | ||
(Click to select)Netoperating income (loss)Variable selling and administrativeexpensesContribution marginVariable cost of goods soldFixedmanufacturing overheadSalesFixed selling and administrativeexpenses | ||
(Click to select)Net operating lossNet operatingincome | $ | |