Check my work Problem 6A-5 Super-Variable Costing, Variable Costing, and Absorpt

Question

Check my work Problem 6A-5 Super-Variable Costing, Variable Costing, and Absorption Costing Income Statements [L06-2, LO6-6 Bracey Company manufactures and sells one product. The following Information pertalns to the company's first year of operations: Variable cost per unit Direct materials 28 Fixed costs per year Direct labor Fixed manufacturing overhead Fixed selling and administrative expenses 367,580 $ 389,558 $ 66,8e8 The company does not Incur any variable manufacturing overhead costs or varlable selling and administrative expenses. During its first year of operations, Bracey produced 24,500 units and sold 22.700 units. The sellilng price of the company's product is $65 per unit. Requlrec 1. Assume the company uses super-varlable costing: a. Compute the unit product cost for the year b. Prepare an Income statement for the year. 2. Assume the company uses a varlable costing system that assigns $15.00 of direct labor cost to each unit produced: a. Compute the unit product cost for the year b. Prepare an Income statement for the year. 3. Assume the company uses an absorption costing system that assigns $15.00 of dlrect labor cost and $15.90 of fixed manufacturing overhead cost to each unit produced: a. Compute the unit product cost for the year b. Prepare an Income statement for the year. 4a. Reconcile the difference between the super-varlable costing and varlable costing net operating Incomes 4b. Reconcile the difference between the super-variable costing and absorption costing net operating Incomes. Complete this question by entering your answers in the tabs below Req 1A Req 1B Req 2A Req 2B Req 3A Req 3B Req 4A Req 4B Compute the unit product cost for the year. Assume the company uses super-variable costing t product cost

Explanation / Answer

Bracey Compny Unit Product cost under super variable method 1 (a) Direct Material $                               28.00 Unit Product cost $                               28.00 Income Statement under Super Variable costing 1 (b) Production(Units) 24500 sales(Units) 22700 Selling price (22700*$65) $                 1,475,500.00 Variable cost Direct Matrial cost (22700*$28) $                     635,600.00 Contribution Margin=($65-$28)*22700 $                     839,900.00 Less Fixed Expenses Direct Labor $                     367,500.00 Fixed Manufacturing Overhead $                     389,550.00 Fixed Selling & Administerative expenses $                       66,000.00 Net Operative Income $                       16,850.00 2 (a) Unit Product cost under variable method Direct Material $                               28.00 Direct Labor=($367500/24500) $                               15.00 Unit Product cost $                               43.00 2(b) Income Statement under Variable costing Production(Units) 24500 sales(Units) 22700 Selling price =(22700*$65) $                 1,475,500.00 Variable cost Direct Matrial cost =(22700*$28) $                     635,600.00 Direct Labor cost=(22700*$15) $                     340,500.00 Contribution Margin=($1475500-$635600-$340500) $                     499,400.00 Less Fixed Expenses Fixed Manufacturing Overhead $                     389,550.00 Fixed Selling & Administerative expenses $                       66,000.00 Net Operative Income $                       43,850.00 3(a) Unit Product cost under Absorption Costing method Direct Material $                               28.00 Direct Labor=($367500/24500) $                               15.00 Fixed Manufacturing Overhead=($389550/24500) $                               15.90 Unit Product cost $                               58.90 3(b) Income Statement under Absorption costing Method Production 24500 Sales 22700 Unit Selling Price $                               65.00 Variable Manufacturing Overhead=($28+$15) $                               43.00 Fixed Manufacturing Overhead $                               15.90 Cost of goods sold=($43+$15.90) $                               58.90 Gross Margin $                                  6.10 Total Gross Margin=(22700*$6.10) $                     138,470.00 Fixed selling & Administerative Expenses $                       66,000.00 Net Operating Income $                       72,470.00 4(a) Reconcile the differnce between super variable costing and variable costing Super variable costing net operating income $                       16,850.00 Add: Direct Labor cost deferred in inventory=($15*1800) $                       27,000.00 Variable costing net operating income $                       43,850.00 4(b) Reconcile the differnce between Absorption costing and super variable costing Super variable costing net operating income $                       16,850.00 Add: Direct Labor cost deferred in inventory=($15*1800) $                       27,000.00 Add: Manufacturing Overhead cost deferred in inventory=($15.90*1800) $                       28,620.00 Absorption costing net operating income $                       72,470.00 Table Requirement 1a $                               28.00 Requirement 1b $                       16,850.00 Requirement 2a $                               43.00 Requirement 2b $                       43,850.00 Requirement 3a $                               58.90 Requrement 3b $                       72,470.00

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