Maga Company, which has only one product, has provided thefollowing data concerning its most recent month of operations:
Selling price $ 185 Units in beginninginventory 0 Units produced 3,690 Units sold 3,000 Units in endinginventory 690 Variable costs perunit: Directmaterials $ 46 Direct labor $ 50 Variablemanufacturing overhead $ 9 Variable selling andadministrative $ 20 Fixed costs: Fixed manufacturingoverhead $ 129,150 Fixed selling andadministrative $ 9,000
Required:
a. What is the unit product cost for the month under variablecosting? (Do not round intermediate calculations. Omit the"$" sign in your response.)
Cost perunit Variablecosting $
b. What is the unit product cost for the month under absorptioncosting? (Omit the "$" sign in your response.)
Cost perunit Absorptioncosting $
c. 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)Variable selling and administrative expensesSelling andadministrative expensesVariable cost of goods soldContributionmarginNet operating income (loss)Manufacturing overheadSales $ Variableexpenses: (Click to select)DirectmaterialsNet operating incomeContribution marginSalesVariableselling and administrative expensesDirect laborVariable cost ofgoods sold $ (Click to select)Netoperating incomeDirect materialsVariable selling and administrativeexpensesDirect laborSalesVariable cost of goods soldContributionmargin (Click toselect)Variable selling and administrative expensesNet operatingincome (loss)Variable cost of goods soldContributionmarginSalesManufacturing overheadSelling and administrativeexpenses Fixed expenses: (Click toselect)Contribution marginFixed selling and administrativeexpensesFixed manufacturing overheadSalesVariable selling andadministrative expensesVariable cost of goods soldNet operatingincome (Click toselect)SalesContribution marginNet operating incomeFixedmanufacturing overheadVariable selling and administrativeexpensesFixed selling and administrative expensesVariable cost ofgoods sold (Click toselect)Variable cost of goods soldManufacturing overheadNetoperating income (loss)Selling and administrativeexpensesContribution marginVariable selling and administrativeexpensesSales $
d. Prepare an income statement for the month using absorptioncosting. (Input all amounts as positive values exceptlosses which should be indicated by a minus sign. Omit the "$" signin your response.)
Absorption Costing Income Statement (Click toselect)SalesGross marginNet operating income (loss)Fixed sellingand administrative expensesCost of goods soldVariable selling andadministrative expenses $ (Click toselect)Fixed selling and administrative expensesVariable sellingand administrative expensesGross marginCost of goods soldSalesNetoperating income (loss) (Click toselect)SalesNet operating income (loss)Gross marginFixed sellingand administrative expensesVariable selling and administrativeexpensesCost of goods sold Selling andadministrative expenses: (Click toselect)Fixed selling and administrative expensesGross marginCost ofgoods soldVariable selling and administrative expensesNet operatingincome (loss)Sales $ (Click toselect)Fixed selling and administrative expensesSalesCost of goodssoldNet operating income (loss)Variable selling and administrativeexpensesGross margin (Click toselect)Cost of goods soldSalesFixed selling and administrativeexpensesVariable selling and administrative expensesNet operatingincome (loss)Gross margin $
e. Reconcile the variable costing and absorption costing netoperating incomes for the month. (Omit the "$" sign in yourresponse.)
Reconciliation of Variable Costing and Absorption Costing NetOperating Incomes Variable costing netoperating income $ (Click toselect)AddDeduct: (Click to select)Fixed manufacturing overheadcosts deferred in inventory under absorption costingFixedmanufacturing overhead costs released from inventory underabsorption costing Absorption costingnet operating income $
Maga Company, which has only one product, has provided thefollowing data concerning its most recent month of operations: |
| Selling price | $ | 185 |
| Units in beginninginventory | 0 | |
| Units produced | 3,690 | |
| Units sold | 3,000 | |
| Units in endinginventory | 690 | |
| Variable costs perunit: | ||
| Directmaterials | $ | 46 |
| Direct labor | $ | 50 |
| Variablemanufacturing overhead | $ | 9 |
| Variable selling andadministrative | $ | 20 |
| Fixed costs: | ||
| Fixed manufacturingoverhead | $ | 129,150 |
| Fixed selling andadministrative | $ | 9,000 |
| Required: |
| a. | What is the unit product cost for the month under variablecosting? (Do not round intermediate calculations. Omit the"$" sign in your response.) |
| Cost perunit | |
| Variablecosting | $ |
| b. | What is the unit product cost for the month under absorptioncosting? (Omit the "$" sign in your response.) |
| Cost perunit | |
| Absorptioncosting | $ |
| c. | 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)Variable selling and administrative expensesSelling andadministrative expensesVariable cost of goods soldContributionmarginNet operating income (loss)Manufacturing overheadSales | $ | |
| Variableexpenses: | ||
| (Click to select)DirectmaterialsNet operating incomeContribution marginSalesVariableselling and administrative expensesDirect laborVariable cost ofgoods sold | $ | |
| (Click to select)Netoperating incomeDirect materialsVariable selling and administrativeexpensesDirect laborSalesVariable cost of goods soldContributionmargin | ||
| (Click toselect)Variable selling and administrative expensesNet operatingincome (loss)Variable cost of goods soldContributionmarginSalesManufacturing overheadSelling and administrativeexpenses | ||
| Fixed expenses: | ||
| (Click toselect)Contribution marginFixed selling and administrativeexpensesFixed manufacturing overheadSalesVariable selling andadministrative expensesVariable cost of goods soldNet operatingincome | ||
| (Click toselect)SalesContribution marginNet operating incomeFixedmanufacturing overheadVariable selling and administrativeexpensesFixed selling and administrative expensesVariable cost ofgoods sold | ||
| (Click toselect)Variable cost of goods soldManufacturing overheadNetoperating income (loss)Selling and administrativeexpensesContribution marginVariable selling and administrativeexpensesSales | $ | |
| d. | Prepare an income statement for the month using absorptioncosting. (Input all amounts as positive values exceptlosses which should be indicated by a minus sign. Omit the "$" signin your response.) |
| Absorption Costing Income Statement | |||
| (Click toselect)SalesGross marginNet operating income (loss)Fixed sellingand administrative expensesCost of goods soldVariable selling andadministrative expenses | $ | ||
| (Click toselect)Fixed selling and administrative expensesVariable sellingand administrative expensesGross marginCost of goods soldSalesNetoperating income (loss) | |||
| (Click toselect)SalesNet operating income (loss)Gross marginFixed sellingand administrative expensesVariable selling and administrativeexpensesCost of goods sold | |||
| Selling andadministrative expenses: | |||
| (Click toselect)Fixed selling and administrative expensesGross marginCost ofgoods soldVariable selling and administrative expensesNet operatingincome (loss)Sales | $ | ||
| (Click toselect)Fixed selling and administrative expensesSalesCost of goodssoldNet operating income (loss)Variable selling and administrativeexpensesGross margin | |||
| (Click toselect)Cost of goods soldSalesFixed selling and administrativeexpensesVariable selling and administrative expensesNet operatingincome (loss)Gross margin | $ | ||
| e. | Reconcile the variable costing and absorption costing netoperating incomes for the month. (Omit the "$" sign in yourresponse.) |
| Reconciliation of Variable Costing and Absorption Costing NetOperating Incomes | |
| Variable costing netoperating income | $ |
| (Click toselect)AddDeduct: (Click to select)Fixed manufacturing overheadcosts deferred in inventory under absorption costingFixedmanufacturing overhead costs released from inventory underabsorption costing | |
| Absorption costingnet operating income | $ |
Related questions
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 | $ |
Maga Company, which has only one product, has provided thefollowing data concerning its most recent month of operations: |
| Selling price | $ | 167 |
| Units in beginninginventory | 0 | |
| Units produced | 3,410 | |
| Units sold | 3,180 | |
| Units in endinginventory | 230 | |
| Variable costs perunit: | ||
| Directmaterials | $ | 48 |
| Direct labor | $ | 55 |
| Variablemanufacturing overhead | $ | 13 |
| Variable selling andadministrative | $ | 12 |
| Fixed costs: | ||
| Fixed manufacturingoverhead | $ | 102,300 |
| Fixed selling andadministrative | $ | 12,720 |
| Required: |
| a. | What is the unit product cost for the month under variablecosting? (Do not round intermediate calculations. Omit the"$" sign in your response.) |
| Cost perunit | |
| Variablecosting | $ |
| b. | What is the unit product cost for the month under absorptioncosting? (Omit the "$" sign in your response.) |
| Cost perunit | |
| Absorptioncosting | $ |
| c. | 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)SalesVariable cost of goods soldManufacturingoverheadVariable selling and administrative expensesContributionmarginNet operating income (loss)Selling and administrativeexpenses | $ | |
| Variableexpenses: | ||
| (Click to select)DirectlaborSalesVariable selling and administrative expensesVariable costof goods soldNet operating incomeContribution marginDirectmaterials | $ | |
| (Click to select)Variableselling and administrative expensesContribution marginSalesDirectmaterialsVariable cost of goods soldDirect laborNet operatingincome | ||
| (Click toselect)SalesNet operating income (loss)ManufacturingoverheadVariable selling and administrative expensesSelling andadministrative expensesContribution marginVariable cost of goodssold | ||
| Fixed expenses: | ||
| (Click toselect)SalesFixed manufacturing overheadVariable cost of goodssoldVariable selling and administrative expensesNet operatingincomeContribution marginFixed selling and administrativeexpenses | ||
| (Click to select)Netoperating incomeSalesVariable cost of goods soldContributionmarginVariable selling and administrative expensesFixed selling andadministrative expensesFixed manufacturing overhead | ||
| (Click to select)Netoperating income (loss)Selling and administrativeexpensesContribution marginVariable cost of goods soldVariableselling and administrative expensesSalesManufacturing overhead | $ | |
| d. | Prepare an income statement for the month using absorptioncosting. (Input all amounts as positive values exceptlosses which should be indicated by a minus sign. Omit the "$" signin your response.) |
| Absorption Costing Income Statement | |||
| (Click toselect)Variable selling and administrative expensesCost of goodssoldNet operating income (loss)Fixed selling and administrativeexpensesGross marginSales | $ | ||
| (Click to select)Netoperating income (loss)Cost of goods soldGross marginVariableselling and administrative expensesFixed selling and administrativeexpensesSales | |||
| (Click toselect)Cost of goods soldVariable selling and administrativeexpensesNet operating income (loss)Fixed selling and administrativeexpensesSalesGross margin | |||
| Selling andadministrative expenses: | |||
| (Click toselect)Cost of goods soldSalesVariable selling and administrativeexpensesNet operating income (loss)Fixed selling and administrativeexpensesGross margin | $ | ||
| (Click toselect)Gross marginSalesFixed selling and administrativeexpensesVariable selling and administrative expensesCost of goodssoldNet operating income (loss) | |||
| (Click toselect)Fixed selling and administrative expensesCost of goodssoldNet operating income (loss)Variable selling and administrativeexpensesSalesGross margin | $ | ||
| e. | Reconcile the variable costing and absorption costing netoperating incomes for the month. (Omit the "$" sign in yourresponse.) |
| Reconciliation of Variable Costing and Absorption Costing NetOperating Incomes | |
| Variable costing netoperating income | $ |
| (Click toselect)DeductAdd: (Click to select)Fixed manufacturing overheadcosts deferred in inventory under absorption costingFixedmanufacturing overhead costs released from inventory underabsorption costing | |
| Absorption costingnet operating income | $ |
| 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.)
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