1) Compute the operating income under variable costing Problem 1 Longview Golf C

Question

1) Compute the operating income under variable costing Problem 1 Longview Golf Company sells a special putter for $20 each. In March, it sold 30,000 putters while manufacturing 33,000. There was beginning inventory of 1,000 putters on March I with same per unit cost level as March productions. Production information for March was: S 30 product 3, Direct materials cost per unit $2 Direct manufacturing labor per unit $6 Variable manufacturing overhead per unit $ 4 Fixed manufacturing overhead total $132,000 Variable selling expenses per unit S 5 Fixed selling and administrative costs total S 30.000 ih ve P > S Jo Longview uses standard accounting, and does not have any cost variance during the period Required:

Explanation / Answer

Answer:-

Longview Golf company Income statement using variable costing Particulars Amount $ Sales (a) 30000 units*$20 per unit 600000 Less:- Variable cost of goods sold (b) Opening inventory 1000 units*$12 per unit 12000 Add:- Variable cost of goods manufatured 33000 units*12 per unit 396000 Variable cost of goods available for sale 408000 Less:- Closing inventory 4000 units*$12 per unit 48000 360000 Gross contribution margin C= a-b 240000 Less:-Variable selling expenses 30000 units*$5 per unit 150000 Contribution margin 90000 Less:- Period Expenses Fixed Manufaturing overhead 132000 Fixed Selling & Administrative overhead 30000 Net Opreating Income -72000

Related Questions

Navigate

• Browse (All)
• Browse 1
• Subjects

---

---

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