The Dorset Corporation produces and sells a single product. Thefollowing data refer to the year just completed:
Beginning inventory 0 Units produced 29,500 Units sold 20,400 Selling price per unit $ 469 Selling and administrativeexpenses: Variable per unit $ 19 Fixed per year $ 346,800 Manufacturing costs: Direct materials cost perunit $ 203 Direct labor cost per unit $ 50 Variable manufacturing overheadcost per unit $ 30 Fixed manufacturing overhead peryear $ 442,500
Assume that direct labor is a variable cost.
Required:
a. Compute the unit product cost under both the absorptioncosting and variable costing approaches.
b. Prepare an income statement for the year using absorptioncosting.
c. Prepare an income statement for the year using variablecosting.
d. Reconcile the absorption costing and variable costing netoperating income figures in (b) and (c) above.
The Dorset Corporation produces and sells a single product. Thefollowing data refer to the year just completed:
| Beginning inventory | 0 | |
| Units produced | 29,500 | |
| Units sold | 20,400 | |
| Selling price per unit | $ | 469 |
| Selling and administrativeexpenses: | ||
| Variable per unit | $ | 19 |
| Fixed per year | $ | 346,800 |
| Manufacturing costs: | ||
| Direct materials cost perunit | $ | 203 |
| Direct labor cost per unit | $ | 50 |
| Variable manufacturing overheadcost per unit | $ | 30 |
| Fixed manufacturing overhead peryear | $ | 442,500 |
Assume that direct labor is a variable cost.
Required:
a. Compute the unit product cost under both the absorptioncosting and variable costing approaches.
b. Prepare an income statement for the year using absorptioncosting.
c. Prepare an income statement for the year using variablecosting.
d. Reconcile the absorption costing and variable costing netoperating income figures in (b) and (c) above.
Related questions
The Dorset Corporation produces and sells a single product. The following data refer to the year just completed:
| Beginning inventory | 0 | |
| Units produced | 34,000 | |
| Units sold | 25,900 | |
| Selling price per unit | $ | 482 |
| Selling and administrative expenses: | ||
| Variable per unit | $ | 16 |
| Fixed per year | $ | 362,600 |
| Manufacturing costs: | ||
| Direct materials cost per unit | $ | 240 |
| Direct labor cost per unit | $ | 56 |
| Variable manufacturing overhead cost per unit | $ | 34 |
| Fixed manufacturing overhead per year | $ | 578,000 |
Assume that direct labor is a variable cost.
Required:
a. Compute the unit product cost under both the absorption costing and variable costing approaches.
b. Prepare an income statement for the year using absorption costing.
c. Prepare an income statement for the year using variable costing.
d. Reconcile the absorption costing and variable costing net operating income figures in (b) and (c) above.
| The EG Company produces andsells single product. The following data refer to the year justcompleted: |
| Beginninginventory | 0 | |
| Units produced | 29,100 | |
| Units sold | 26,600 | |
| Selling price perunit | $ | 435 |
| Selling andadministrative expenses: | ||
| Variable perunit | $ | 24 |
| Fixed (total) | $ | 345,800 |
| Manufacturingcosts: | ||
| Direct materialscost per unit | $ | 239 |
| Direct labor costper unit | $ | 55 |
| Variablemanufacturing overhead cost per unit | $ | 34 |
| Fixed manufacturingoverhead (total) | $ | 582,000 |
Assume that direct labor is a variable cost. |
| Required: |
| a. | Compute the cost of a single unit of product under both theabsorption costing and variable costing approaches. (Omitthe "$" sign in your response.)
|
