Sivan Co. manufactures and sells one product. For the year, theystarted with no opening inventory; produced 100,000 units, but onlysold 70,000 units. The selling price per each unit is $60.
The variable costs per unit were:
Direct materials.........................7
Direct Labor .............................6
Variable manufacturing overhead ....5
Variable selling and administrativeâ¦6
Fixed costs per year:
Fixed manufacturing Overhead ................$700,000
Fixed Selling and Administrative expenses.. $300,000
(a) Prepare the Income Statement using Absorption Costing.
(b) Prepare the Income Statement using Variable Costing
Sivan Co. manufactures and sells one product. For the year, theystarted with no opening inventory; produced 100,000 units, but onlysold 70,000 units. The selling price per each unit is $60.
The variable costs per unit were:
Direct materials.........................7
Direct Labor .............................6
Variable manufacturing overhead ....5
Variable selling and administrativeâ¦6
Fixed costs per year:
Fixed manufacturing Overhead ................$700,000
Fixed Selling and Administrative expenses.. $300,000
(a) Prepare the Income Statement using Absorption Costing.
(b) Prepare the Income Statement using Variable Costing
Related questions
1. (TCO 3) The Mixing Department is the thirddepartment in the MZS Inc. factory. During January, there were4,000 units of beginning inventory in the Mixing Department, and80,000 units were transferred in from the prior process. There were8,000 units in ending inventory. The transferred-in cost in thebeginning inventory was $170,000 and there was $600,000 intransferred-in cost during the month.
What is the cost per equivalent unit for transferred-incost? (Points : 25)
| Question 2. 2. (TCO 4) Assume that we aremanufacturing a product and assume that the sales price per unit is$80, the variable cost is $20 per unit, and the fixed cost is$90,000; a) how many units would we need to sell to break even? b)How many units would we need to sell to earn a profit of $120,000?c) How many units do we need to sell to double that profit to$240,000? D) Why didn't the number of units double from Part B toPart C? (Points : 25) |
| Question 3. 3. (TCO 5) Sivan Co. manufacturesand sells one product. For the year, they started with no openinginventory; produced 100,000 units, but only sold 70,000 units. Theselling price per each unit is $60. |
| Question 4. 4. (TCO 6) At Long Co., electricitycost starts with a minimum fixed cost, and after that, there is aperfectly variable expense. Using estimated machine hours: |
| Question 5. 5. (TCO 7) North Company produces asmall part that it uses in the production of its Product H. Thecompany's unit product cost for the part, based on a production of100,000 parts per year, is as follows: |
| Question 6. 6. (TCO 9) (TCO 9) Harry Corp buysequipment for $224,888 that will last for 9 years. The equipmentwill generate cash flows of $36,000 per year and will have nosalvage value at the end of its life. Ignore taxes. Use 10%required rate of return. |
| Question 7. 7. (TCO 10) Tanya Corp sells itsproducts on both credit and cash basis. Monthly sales are sold 20%for cash, 80% for credit. Credit sales are collected 65% in themonth of sale and 35% the following month. Salesfor the first quarter are BUDGETED as follows: January $200,000;February $300,000; March $300,000. |
