The selling price per unit is $3600. The budgeted level of production used to ca

Question

The selling price per unit is $3600. The budgeted level of production used to calculate the budgeted fixed mfg cost per unit is 1000 units. THere are no price, efficiency, or spending variances. Any PVV is written off to COGS in the month in which it occurs.

(a) Prepare income statements for High-Tech in Jan, Feb, and Mar of 2014 under variable costing.

(b) Prepare income statements for High-Tech in Jan, Feb, and Mar of 2014 under absorption costing.

PLEASE HELP! I am having problems with getting the information for the absorption costing. I have the info for part (a). I appreciate the help!

Jan Feb Mar Unit Data Beginning Inv 0 100 100 Production 1000 950 1020 Sales 900 950 1030 Variable Costs Mfg Cost per unit produced 700 700 700 Op (marketing)cost per unit sold 525 525 525 Fixed costs Mfg costs 420,000 420,000 420,000 Op (marketing) costs 110,000 110,000 110,000

Explanation / Answer

b. Income Statements for High-Tech:

Cost of production per unit = Variable manufacturing cost per unit + predermined fixed manufacturing overhead rate

= 700 + 420,000 / 1,000 = $ 1,120

Jan: Cost of goods sold = 900 x 1,120 = $ 1,008,000

Feb: Cost of goods sold = 950 x 1,120 = $ 1,064,000

Mar: Cost of goods sold = 1,030 x 1,120 = $ 1,153,600

Jan Feb Mar Sales 3,240,000 3,420,000 3,708,000 Cost of goods sold 1,008,000 1,064,000 1,153,600 Gross profit 2,232,000 2,356,000 2,554,400 Less Variable marketing cost 472,500 498,750 540,750 Fixed marketing cost 110,000 110,000 110,000 Income from operations 1,649,500 1,747,250 1,903,650

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