Mahugh Corporation, which has only one product, has provided thefollowing data concerning its most recent month of operations:
Selling price 187 Units in beginninginventory 0 Units produced 3,660 Units sold 3,100 Units in endinginventory 560 Variable costs perunit: Directmaterials 50 Direct labor 55 Variablemanufacturing overhead 17 Variable selling andadministrative 19 Fixed costs: Fixed manufacturingoverhead $ 124,440 Fixed selling andadministrative $ 9,300
Required:
a. What is the unit product cost for the monthunder variable costing? (Do not round intermediatecalculations.)
b. What is the unit product cost forthe month under absorption costing?
c. Prepare a contribution formatincome statement for the month using variable costing.
d. Prepare an income statement forthe month using absorption costing.
Mahugh Corporation, which has only one product, has provided thefollowing data concerning its most recent month of operations:
| Selling price | 187 | |
| Units in beginninginventory | 0 | |
| Units produced | 3,660 | |
| Units sold | 3,100 | |
| Units in endinginventory | 560 | |
| Variable costs perunit: | ||
| Directmaterials | 50 | |
| Direct labor | 55 | |
| Variablemanufacturing overhead | 17 | |
| Variable selling andadministrative | 19 | |
| Fixed costs: | ||
| Fixed manufacturingoverhead | $ | 124,440 |
| Fixed selling andadministrative | $ | 9,300 |
Required:
a. What is the unit product cost for the monthunder variable costing? (Do not round intermediatecalculations.)
b. What is the unit product cost forthe month under absorption costing?
c. Prepare a contribution formatincome statement for the month using variable costing.
d. Prepare an income statement forthe month using absorption costing.
Related questions
makes an oak desk specially designed for personal computers. Thedesk sells for $205. Data for last yearâs operations follow: |
| Units in beginninginventory | 0 | |
| Units produced | 9,800 | |
| Units sold | 9,300 | |
| Units in endinginventory | 500 | |
| Variable costs perunit: | ||
| Direct materials | $ 61 | |
| Direct labor | 39 | |
| Variable manufacturingoverhead | 15 | |
| Variable selling andadministrative | 20 | |
| Total variable costper unit | $ 135 | |
| Fixed costs: | ||
| Fixed manufacturingoverhead | $ | 323,400 |
| Fixed selling andadministrative | 510,000 | |
| Total fixedcosts | $ | 833,400 |
| Required: |
| 1. | Assume that the company uses absorption costing. Compute theunit product cost for one computer desk. (Round your answerto the nearest whole dollar.) |
| 2. | Assume that the company uses absorption costing. Prepare anincome statement. |
Chuck Wagon Grills, Inc., makes a single productâa handmadespecialty barbecue grill that it sells for $215. Data for lastyearâs operations follow: |
| Units in beginninginventory | 0 | |
| Units produced | 9,900 | |
| Units sold | 9,200 | |
| Units in endinginventory | 700 | |
| Variable costs perunit: | ||
| Direct materials | $ 62 | |
| Direct labor | 37 | |
| Variable manufacturingoverhead | 13 | |
| Variable selling andadministrative | 20 | |
| Total variable cost perunit | $ 132 | |
| Fixed costs: | ||
| Fixed manufacturingoverhead | $ | 306,900 |
| Fixed selling andadministrative | 500,000 | |
| Total fixed costs | $ | 806,900 |
| Required: |
| 1. | Assume that the company uses absorption costing. Compute theunit product cost for one barbecue grill. |
| 2. | Assume that the company uses absorption costing. Prepare anincome statement. |
Packer Company, which has only one product, has provided thefollowing data concerning its most recent month of operations: |
| Selling price | $ | 112 |
| Units in beginninginventory | 590 | |
| Units produced | 2,000 | |
| Units sold | 2,210 | |
| Units in endinginventory | 380 | |
| Variable costs perunit: | ||
| Directmaterials | $ | 28 |
| Direct labor | $ | 25 |
| Variablemanufacturing overhead | $ | 2 |
| Variable selling andadministrative | $ | 20 |
| Fixed costs: | ||
| Fixed manufacturingoverhead | $ | 48,000 |
| Fixed selling andadministrative | $ | 6,630 |
The company produces the same number of units every month,although the sales in units vary from month to month. The company'svariable costs per unit and total fixed costs have been constantfrom month to month. (Hint: Use the reconciliation method.) |
| Required: |
| a. | What is the unit product cost for the month under variablecosting? (Omit the "$" sign in your response.) |
| Cost perunit | |
| Variablecosting | $ |
| b. | Prepare a contribution format income statement for the monthusing variable costing. (Input all amounts as positivevalues except losses which should be indicated by a minus sign.Omit the "$" sign in your response.) |
| Variable Costing Income Statement | ||
| (Click toselect)Manufacturing overheadContribution marginSalesNet operatingincome (loss)Selling and administrative expensesVariable cost ofgoods soldVariable selling and administrative expenses | $ | |
| Variableexpenses: | ||
| (Click to select)Variableselling and administrative expensesManufacturing overheadNetoperating incomeSalesContribution marginVariable cost of goodssold | $ | |
| (Click toselect)Contribution marginVariable cost of goods soldManufacturingoverheadNet operating incomeSalesVariable selling andadministrative expenses | ||
| (Click toselect)Contribution marginSalesVariable cost of goodssoldManufacturing overheadVariable selling and administrativeexpensesNet operating income (loss) | ||
| Fixed expenses: | ||
| (Click to select)SalesNetoperating incomeFixed selling and administrative expensesVariablecost of goods soldContribution marginFixed manufacturingoverheadVariable selling and administrative expenses | ||
| (Click to select)SalesNetoperating incomeVariable cost of goods soldVariable selling andadministrative expensesFixed selling and administrativeexpensesFixed manufacturing overheadContribution margin | ||
| (Click toselect)Variable selling and administrative expensesManufacturingoverheadNet operating income (loss)Variable cost of goodssoldSelling and administrative expensesContributionmarginSales | $ | |
| c. | Without preparing an income statement, determine the absorptioncosting net operating income for the month. (Omit the "$"sign in your response.) |
| Reconciliation of Variable Costing and Absorption Costing NetOperating Incomes | |
| Variable costing netoperating income | $ |
| (Click toselect)DeductAdd: (Click to select)Fixed manufacturing overheadcosts released from inventory under absorption costingFixedmanufacturing overhead costs deferred in inventory under absorptioncosting | |
| Absorption costingnet operating income | $ |
