9 Backspace 8 9-23 quiz 4 Stadent 1. Information taken from Giles Corporation\'s

Question

9 Backspace 8 9-23 quiz 4 Stadent 1. Information taken from Giles Corporation's May accounting records follows. Direct materials used Direct labor Variable manufacturing overhcad Fixed manufacturing overhcad Variable selling and administrative costs Fixed selling and administrative costs Sales revenues S150,000 80,000 30,000 100,000 51,000 60,000 625,000 Required A. Assuming the use of variable costing, compute the inventoriable costs for the month. B. Compute the month's inventoriable costs by using absorption costing C. Assume that anticipated and actual production totaled 20,000 units, and tha during May. Determine the amount of fixed manufacturing overhead and fixed selling and administrative costs that would be expensed for the month under (1) variable costing and (2) absorption costing. D. Assume the same data as in requirement "C." Compate the contribution margin that would be reported on a variable-costing income statement.

Explanation / Answer

Req A: Inventoriable cost under Variable costing: Direct maetrial 150,000 Direct labour 80,000 Variable Manufacturing overheads 30,000 Total inventoriable cost 260,000 ReqB: Inventoriable cost under Absorption costing: Direct maetrial 150,000 Direct labour 80,000 Variable Manufacturing overheads 30,000 Fixed Manufacturing overheads 100,000 Total inventoriable cost 360,000 ReqC: Units produced 20,000 units Units Sold             18,000 units Under variable costing(whole of fixed expenses are expense with) Therefore, total expense under vbariable costing: Fixed manufacturing expense 100,000 Fixed selling expense 60,000 Total Fixed expense to be charged 160,000 Under Absorption(Proprotionate expense related to units sold for manufacturing expense to be expensed and fixed selling expense are to be wholly expensed) Therefore, expense are as follows unde Absorption costing: Fixed manufacturing expense (100,000 /20,000 *18,000) = 90,000 Fixed Selling expense                                                                     = 60,000 Total Fixed expense to be charged 150,000 ReqD: Contribution margin under Variable costing method: Sales revenue 625000 Less: Variable cost Direct material' 150000 Direct labour' 80000 Variable manufacturing overheads 30000 Variable selling expense 51000 CONTRIBUTION MARGIN 314000

Related Questions

Navigate

• Browse (All)
• Browse 9
• Subjects

---

---

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