6-459
6-460
6-461
212.
Pabbatti Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price
$112
Units in beginning inventory
500
Units produced
2,800
Units sold
2,900
Units in ending inventory
400
Variable costs per unit:
Direct materials
$37
Direct labor
$19
Variable manufacturing overhead
$7
Variable selling and administrative
$5
Fixed costs:
Fixed manufacturing overhead
$109,200
Fixed selling and administrative
$5,800
The company produces the same number of units every month, although the sales in units
vary from month to month. The company’s variable costs per unit and total fixed costs
have been constant from month to month.
Required:
a. What is the unit product cost for the month under variable costing?
b. Prepare a contribution format income statement for the month using variable costing.
c. Without preparing an income statement, determine the absorption costing net
operating income for the month. (Hint: Use the reconciliation method.)
6-462
6-463
6-464
213.
Italia Espresso Machina Inc. produces a single product. Data concerning the company’s
operations last year appear below:
Units in beginning inventory
0
Units produced
2,000
Units sold
1,900
Selling price per unit
$100
Variable costs per unit:
Direct materials
$30
Direct labor
$10
Variable manufacturing overhead
$5
Variable selling and administrative
$2
Fixed costs in total:
Fixed manufacturing overhead
$40,000
Fixed selling and administrative
$60,000
Direct materials
Required:
a. Compute the unit product cost under both absorption and variable costing.
b. Prepare an income statement for the year using absorption costing.
c. Prepare a contribution format income statement for the year using variable costing.
d. Prepare a report reconciling the difference in net operating income between absorption
and variable costing for the year.
6-466
6-467
214.
Mahugh Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price
$122
Units in beginning inventory
0
Units produced
8,300
Units sold
8,200
Units in ending inventory
100
Variable costs per unit:
Direct materials
$27
Direct labor
$46
Variable manufacturing overhead
$4
Variable selling and administrative
$7
Fixed costs:
Fixed manufacturing overhead
$199,200
Fixed selling and administrative
$106,600
Required:
a. What is the unit product cost for the month under variable costing?
b. What is the unit product cost for the month under absorption costing?
c. Prepare a contribution format income statement for the month using variable costing.
d. Prepare an income statement for the month using absorption costing.
e. Reconcile the variable costing and absorption costing net operating incomes for the
month.
6-470
6-471
215.
Qabar Corporation, which has only one product, has provided the following data
concerning its most recent month of operations:
Selling price
$110
Units in beginning inventory
0
Units produced
4,600
Units sold
4,200
Units in ending inventory
400
Variable costs per unit:
Direct materials
$46
Direct labor
$28
Variable manufacturing overhead
$5
Variable selling and administrative
$10
Fixed costs:
Fixed manufacturing overhead
$55,200
Fixed selling and administrative
$25,200
Required:
a. What is the unit product cost for the month under variable costing?
b. Prepare a contribution format income statement for the month using variable costing.
c. Without preparing an income statement, determine the absorption costing net
operating income for the month. (Hint: Use the reconciliation method.)
6-473
6-474
216.
Lee Corporation, which has only one product, has provided the following data concerning
its most recent month of operations:
Selling price
$95
Units in beginning inventory
100
Units produced
6,200
Units sold
5,900
Units in ending inventory
400
Variable costs per unit:
Direct materials
$42
Direct labor
$28
Variable manufacturing overhead
$1
Variable selling and administrative
$5
Fixed costs:
Fixed manufacturing overhead
$62,000
Fixed selling and administrative
$35,400
The company produces the same number of units every month, although the sales in units
vary from month to month. The company’s variable costs per unit and total fixed costs
have been constant from month to month. Assume direct labor is a variable cost.
Required:
a. What is the unit product cost for the month under variable costing?
b. What is the unit product cost for the month under absorption costing?
c. Prepare a contribution format income statement for the month using variable costing.
d. Prepare an income statement for the month using absorption costing.
e. Reconcile the variable costing and absorption costing net operating incomes for the
month.
6-477
6-478
217.
The Dean Corporation produces and sells a single product. The following data refer to the
year just completed:
Beginning inventory
0
Units produced
20,000
Units sold
19,000
Selling price per unit
$350
Selling and administrative
expenses:
Variable per unit
$10
Fixed (total)
$225,000
Manufacturing costs:
Direct materials cost per
unit
$190
Direct labor cost per unit
$40
Variable manufacturing
overhead cost per unit
$25
Fixed manufacturing
overhead (total)
$250,000
Assume that direct labor is a variable cost.
Required:
a. Compute the cost of a single unit of product under both the absorption costing and
variable costing approaches.
b. Prepare an income statement for the year using absorption costing.
c. Prepare a contribution format income statement for the year using variable costing.
d. Reconcile the absorption costing and variable costing net operating income figures in
(b) and (c) above.