56
57
45) Dattilio Corporation manufactures and sells one product. The following information pertains
to the company’s first year of operations:
Variable cost per unit:
Direct materials
$
80
Fixed costs per year:
Direct labor
$
1,404,000
Fixed manufacturing overhead
$
3,402,000
Fixed selling and administrative expenses
$
1,617,000
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 54,000 units
and sold 49,000 units. The company’s only product is sold for $238 per unit.
Required:
a. Assume the company uses super-variable costing. Compute the unit product cost for the year.
b. Assume the company uses super-variable costing. Prepare an income statement for the year.
46) Drucker Corporation manufactures and sells one product. In the company’s first year of
operations, the variable cost consisted solely of direct materials of $84 per unit. The annual fixed
costs were $288,000 of direct labor cost, $1,728,000 of fixed manufacturing overhead expense,
and $782,000 of fixed selling and administrative expense. The company does not have any
variable manufacturing overhead costs or variable selling and administrative expenses. During its
first year of operations, the company produced 24,000 units and sold 17,000 units. The
company’s only product is sold for $249 per unit.
Required:
a. Assume the company uses super-variable costing. Compute the unit product cost for the year.
b. Assume the company uses super-variable costing. Prepare an income statement for the year.
60
47) Woodall Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable cost per unit:
Direct materials
$
98
Fixed costs per year:
Direct labor
$
644,000
Fixed manufacturing overhead
$
2,576,000
Fixed selling and administrative expenses
$
1,804,000
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 46,000 units
and sold 44,000 units. The company’s only product is sold for $235 per unit.
Required:
a. Assume the company uses super-variable costing. Compute the unit product cost for the year
and prepare an income statement for the year.
b. Assume that the company uses a variable costing system that assigns $14 of direct labor cost
to each unit that is produced. Compute the unit product cost for the year and prepare an income
statement for the year.
c. Assume that the company uses an absorption costing system that assigns $14 of direct labor
cost and $56 of fixed manufacturing overhead to each unit that is produced. Compute the unit
product cost for the year and prepare an income statement for the year.
d. Prepare a reconciliation that explains the difference between the super-variable costing and
variable costing net incomes.
e. Prepare a reconciliation that explains the difference between the super-variable costing and
absorption costing net incomes.
64
48) Shelko Corporation manufactures and sells one product. The following information pertains
to the company’s first year of operations:
Variable cost per unit:
Direct materials
$
98
Fixed costs per year:
Direct labor
$
1,176,000
Fixed manufacturing overhead
$
2,940,000
Fixed selling and administrative expenses
$
1,443,000
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 42,000 units
and sold 37,000 units. The company’s only product is sold for $272 per unit.
Required:
a. Assume the company uses super-variable costing. Compute the unit product cost for the year
and prepare an income statement for the year.
b. Assume that the company uses an absorption costing system that assigns $28 of direct labor
cost and $70 of fixed manufacturing overhead to each unit that is produced. Compute the unit
product cost for the year and prepare an income statement for the year.
c. Prepare a reconciliation that explains the difference between the super-variable costing and
absorption costing net incomes.
67
49) Valcarcel Corporation manufactures and sells one product. The following information
pertains to the company’s first year of operations:
Variable cost per unit:
Direct materials
$
84
Fixed costs per year:
Direct labor
$
403,000
Fixed manufacturing overhead
$
1,767,000
Fixed selling and administrative expenses
$
1,150,000
The company does not have any variable manufacturing overhead costs or variable selling and
administrative expenses. During its first year of operations, the company produced 31,000 units
and sold 25,000 units. The company’s only product is sold for $233 per unit.
Required:
a. Assume the company uses super-variable costing. Compute the unit product cost for the year
and prepare an income statement for the year.
b. Assume that the company uses a variable costing system that assigns $13 of direct labor cost
to each unit that is produced. Compute the unit product cost for the year and prepare an income
statement for the year.
c. Prepare a reconciliation that explains the difference between the super-variable costing and
variable costing net incomes.
