6 Ex 6-5 6 Saved Help Save & Exit Check my w Exercise 6-5 Absorption costing and

Question

6 Ex 6-5 6 Saved Help Save & Exit Check my w Exercise 6-5 Absorption costing and variable costing income statements LO P2 Rey Company's single product sells et a price or $219 per unit Data for its single product for its first year of operations follo ints eBook Hint Ask Print Direct materials Direct labor Overhead costs 23 unit 31 unit 9 Der Variable overhead unit $253,000 year Fixed overhead per year Selling and administrative expenses per 21 unit Variable $206,000 per year Fixed 23,000 units Units produced and sold Prev 10f 1 lil Next>

Explanation / Answer

MANUFACTURING AND DETAILS ARE AS BELOW Unit Produced = $                       23,000 Units Unit Sold = $                       23,000 Units Selling Price Per unit $                             219 Per Units Variable Selling Expenses p.U $                                21 Per Units Fixed Selling and administration Expenses $                    2,06,000 CALCULATION OF FIXED OVERHEAD RECOVERY RATE FOR ABSORPTION COSTING Fixed Manufacturing Overhead = $                    2,53,000 "/ " By Units Produced = $                       23,000 Fixed overhead recovery Rate = $                                11 CALCUALTION OF cost of production units by using absorption and variable Costing Particulars Absorption Costing Variable Costing Direct Material Per unit $                          23.00 $                          23.00 Direct Labour Per Unit $                          31.00 $                          31.00 Vairable Overhead $                            9.00 $                            9.00 Fixed Manufacturing Overhead ($253,000 / 23,000 units) $                          11.00 Cost of Production per unit $                          74.00 $                          63.00 ABOSRPTION COSTING INCOME STATEMENTS Absorption Costing Sales $                 50,37,000 Cost of Goods Sold Beginning inventory $                                 -   Cost of Goods Manufactured (23,000 Units X $ 74 Per unit) $                 17,02,000 Less: Ending Inventory $                                 -   Cost of Goods Sold $                 17,02,000 Gross Profit $                 33,35,000 Less : Selling Expenses Fixed Selling Expenses $                    2,06,000 Variable Selling Expenses(23,000 units * 21) $                    4,83,000 Net Income $                 26,46,000 VARIABLE COSTING INCOME STATEMENTS Variable Costing Sales $                 50,37,000 Cost of Goods Sold Beginning inventory $                                 -   Cost of Goods Manufactured (23,000 units * 63) $                 14,49,000 Less: Ending Inventory $                                 -   Cost of Goods Sold $                 14,49,000 Selling Expenses (23000 Units * $ 21) $                    4,83,000 Gross Profit $                 31,05,000 Less: Fixed Manufacturing overhead $                    2,53,000 Less : Fixed Selling Expenses $                    2,06,000 Net Income $                 26,46,000

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