Calculator On December 31, the end of the first year of operations, Frankenreite

Question

Calculator On December 31, the end of the first year of operations, Frankenreiter Inc. manufacture income statement was prepared, based on the variable costing concept: d 25,600 units and sold 24,000 units. The following Frankenreiter Inc. Variable Costing Income Statement For the Year Ended December 31, 20Y1 Sales $9,600,000 Variable cost of goods sold: Variable cost of goods manufactured Inventory, December 31 Total variable cost of goods sold $5,376,000 (336,000) 5,040,000 $4,560,000 1,150,000 $3,410,000 Manufacturing margin Total variable selling and administrative expenses Contribution margin Fixed costs: Fixed manufacturing costs $1,664,000 Fixed selling and administrative expenses 890,000 2,554,000 Total fixed costs Income from operations Determine the unit cost of goods manufactured, based on (a) the variable costing concept and (b) the absorption costing concept. Variable costing Absorption costing $ 856,000 el ?? 08 PM 7/24/2018

Explanation / Answer

1) Calculate unit cost :

variable costing concept = 5376000/25600 = 210 per unit

Absorption costing = (5376000+1664000)/25600 = 275 per unit

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