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http://mail.google.com/mail/u/0/#inbox/161e4c506e42362?projector=1&messageF;·.. aSearch Test 12 Costing Take Home Name ESSAY. Show your work and answerís) on a separate sheet of paper. TO BE COMPLETED BY YOURSELF. Management AccountingChapter (4& 6) Fall 2017 50 points total 1) Hyper Color Company manufactures widgets. The following data is related to sales and production of the widgets for last year Selling price per unit Variable manufacturing costs per unit Variable selling and administrative expenses per unit $61 Fixed manufacturing overhead (in total) Fixed selling and administrative expenses (in total) Units produced during the year Units sold during year 1700 1400 Prepare an operating income statment for both Absorption and Variable Costing (Explain why Operating income is different) (10 points) 2) It costs Homer's Manufacturing $0.75 to produce baseballs and Homer sells them for $4.00 a piece Homer pays a sales commission of 5% of sales revenue to his sales staff Homer also pays $12,000 a month's rent for his factory and store, and also pays $75,000 a month to his staff in addition to the commissions Homer sold 6.500 argin ncome statement t for the month and calculate the contribution

Explanation / Answer

Absorption Costing Sales 130*1400 182000 Less:Cost of goods sold 114223.5 Equals Gross Profit 67776.47 Less Variable selling (1400*10) 14000 Less fixed selling 8000 Operating Income 45776.47 Fixed MOH $ 35,000 divided by units produced 1,700 20.59 Add Variable manufacturing cost 61.00 Total Manufacturing cost 81.59 Sales Units 1400.00 Cost of goods sold 114223.53 Variable Costing Sales 130*1400 182000 Less Variable Mfg cost 61*1400 85400 Less Variable Selling expense 1400*10 14000 Contribution margin 82600 Less fixed cost selling 8000 Manufacturing 35000 Net operating Income 39600

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