The EG Company produces and sells single product. The following data refer to th

Question

The EG Company produces and sells single product. The following data refer to the year just completed:

  Beginning inventory

0

  Units produced

34,300

  Units sold

27,700

  Selling price per unit

$

446

  Selling and administrative expenses:

  Variable per unit

$

20

  Fixed (total)

$

498,600

  Manufacturing costs:

  Direct materials cost per unit

$

259

  Direct labor cost per unit

$

59

  Variable manufacturing overhead cost per unit

$

35

  Fixed manufacturing overhead (total)

$

617,400

Assume that direct labor is a variable cost.

Required:

a.

Compute the cost of a single unit of product under both the absorption costing and variable costing approaches. (Omit the "$" sign in your response.)

Cost per unit

  Absorption costing

$   

  Variable costing

$   

b.

Prepare an income statement for the year using absorption costing. (Input all amounts as positive values except losses which should be indicated by a minus sign. Omit the "$" sign in your response.)

c.

Prepare a contribution format income statement for the year using variable costing. (Input all amounts as positive values except losses which should be indicated by a minus sign. Omit the "$" sign in your response.)

d.

Reconcile the absorption costing and variable costing net operating income figures in (b) and (c) above. (Omit the "$" sign in your response.)

The EG Company produces and sells single product. The following data refer to the year just completed:

Explanation / Answer

a)

b) Income statement under absorption costing

c) Income statement under variable costing

d)Reconcile :

Net operating income Under absorption costing          1024900

Less:Fixed manufacturing cost deferred in ending inventory118800                                    [(34300-27700)=6600*18]

Net operating income as per variable costing               906100

Absorption costing Variable costing DM 259 259 DL 59 59 VMOH 35 35 FMOH 18    [617400/34300] Unit cost 371 353

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.