341
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270) Waltzer Corporation has provided the following data for its two most recent years of
operation:
Selling price per unit
$101
Manufacturing costs:
Variable manufacturing cost per unit produced:
Direct materials
$12
Direct labor
$7
Variable manufacturing overhead
$4
Fixed manufacturing overhead per year
$520,000
Selling and administrative expenses:
Variable selling and administrative expense per unit sold
$4
Fixed selling and administrative expense per year
$72,000
Year 1
Year 2
0
2,000
10,000
13,000
8,000
13,000
2,000
2,000
Required:
a. Assume the company uses absorption costing. Compute the unit product cost in each year.
b. Assume the company uses absorption costing. Prepare an income statement for each year.
c. Assume the company uses variable costing. Compute the unit product cost in each year.
d. Assume the company uses variable costing. Prepare an income statement for each year.
e. Prepare a report in good form reconciling the variable costing and absorption costing net
incomes.
344
271) Lefelmann Corporation, which has only one product, has provided the following data
345
concerning its most recent month of operations:
Selling price
$
138
Units in beginning inventory
500
Units produced
4,100
Units sold
4,300
Units in ending inventory
300
Variable costs per unit:
Direct materials
$
31
Direct labor
$
59
Variable manufacturing overhead
$
4
Variable selling and administrative expense
$
9
Fixed costs:
Fixed manufacturing overhead
$
94,300
Fixed selling and administrative expense
$
47,300
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. 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.
349
272) Pacheo Corporation, which has only one product, has provided the following data concerning
its most recent month of operations:
Selling price
$
55
Units in beginning inventory
500
Units produced
3,100
Units sold
3,300
Units in ending inventory
300
Variable costs per unit:
Direct materials
$
19
Direct labor
$
26
Variable manufacturing overhead
$
1
Variable selling and administrative expense
$
4
Fixed costs:
Fixed manufacturing overhead
$
12,400
Fixed selling and administrative expense
$
3,300
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.)
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273) Maher Corporation, which has only one product, has provided the following data concerning
its most recent month of operations:
Selling price
$
129
Units in beginning inventory
0
Units produced
3,700
Units sold
3,600
Units in ending inventory
100
Variable costs per unit:
Direct materials
$
37
Direct labor
$
38
Variable manufacturing overhead
$
6
Variable selling and administrative expense
$
5
Fixed costs:
Fixed manufacturing overhead
$
103,600
Fixed selling and administrative expense
$
50,400
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.
356
274) The Dorset Corporation produces and sells a single product. The following data refer to the
year just completed:
Beginning inventory
0
Units produced
9,000
Units sold
7,000
Selling price per unit
$
47
Selling and administrative expenses:
Variable per unit
$
4
Fixed per year
$
58,000
Manufacturing costs:
Direct materials cost per unit
$
10
Direct labor cost per unit
$
6
Variable manufacturing overhead cost per unit
$
5
Fixed manufacturing overhead per year
$
90,000
Assume that direct labor is a variable cost.
Required:
a. Compute the unit product cost under both the absorption costing and variable costing
approaches.
b. Prepare an income statement for the year using absorption costing.
c. Prepare an 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.
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275) Last year, Denogean Corporation’s variable costing net operating income was $64,200 and
ending inventory increased by 1,900 units. Fixed manufacturing overhead cost per unit was $4 in
both beginning and ending inventory.
Required:
Determine the absorption costing net operating income for last year.
276) Last year, Rasband Corporation’s variable costing net operating income was $57,000. The
fixed manufacturing overhead costs deferred in inventory under absorption costing amounted to
$30,000.
Required:
Determine the absorption costing net operating income last year.