The following informtion relates to 123 company for fiscal 2014, the company\'s
ID: 2444921 • Letter: T
Question
The following informtion relates to 123 company for fiscal 2014, the company's first year of operation:
United produced: 420,000
Unit sold: 400,000
Selling price per unit: $50
Direct material per unit: $15
Direct labor per unit: $5
Variable manufaturing overhead per unit: $2
Variable selling cost per unit: $0.20
Annual fixed manufacturing overhead: $1,260,000
Annual fixed selling expense: $300,000
Annual fixed administrative expense: $100,000
1) Prepare an income statement using full costing.
2) Prepare an income statement using variable costing.
3) Calculate the amount of fixed manufacturing overhead tht will be included in ending inventory under full costing and reconcile it to the difference between income computed under variable and full costing.
Explanation / Answer
Answer:1)
Answer:2)
Answer:3
Particulars Amount ($) Explanation Sales 20000000 400000*50 Less: Direct Material 6300000 420000*15 Direct Labor 2100000 420000*5 Variable manufacturing overhead 840000 420000*2 Less: Ending inventory (20000*25) 500000 20000*25 Annual fixed manufacturing overhead 1260000 Contribution margin 10000000 Less: Variable selling cost 80000 400000*0.20 Annual fixed selling expense 300000 Annual fixed administrative expense 100000 Net operating income 9520000Related Questions
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