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78 Managerial Accounting, 16th Edition
Exercise 6A-3 (continued)
2. b. The variable costing income statements would be:
Year 1 Year 2
Sales ………………………………………………… $2,000,000 $3,000,000
V
ariable cost of
g
oods sold (@ $22 per unit) 880,000 1,320,000
Contribution mar
g
in …………………………….. 1,120,000 1,680,000
Fixed expenses:
T
3. The net operating incomes are reconciled as follows:
Y
ear
1
Y
ear
2
Units in be
g
innin
g
inventory…………………… 0 10,000
g
Y
ear
1
Y
ear
2
Direct labor cost in endin
g
inventory
(10,000 units × $10 per unit) ………………. $100,000 $ 0
Deduct: Direct labor cost in be
g
innin
g
Y
ear
1
Y
ear
2
Super-
v
ariable costin
g
net operatin
g
income $390,000 $1,150,000
A
dd: Direct labor deferred in inventory
V
g
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Solutions Manual, Appendix 6A 79
Problem 6A-4 (30 minutes)
1. a. and b. The unit product cost for all three years under super–variable costing would include direct
materials of $16 per unit. The super-variable costing income statements appear below:
Y
ear
1
Y
ear
2
Y
ear
3
Sales (@ $45 per unit) ………………………………………. $2,700,000 $2,475,000 $2,925,000
V
ariable cost of
g
oods sold (@ $16 per unit) ………….. 960,000 880,000 1,040,000
Contribution mar
g
in ………………………………………….. 1,740,000 1,595,000 1,885,000
Fixed expenses:
T
© The McGraw-Hill Companies, Inc., 2018. All rights reserved.
80 Managerial Accounting, 16th Edition
Problem 6A-4 (continued)
2. a. The unit product costs under variable costing:
Y
ear
1
Y
ear
2
Y
ear
3
Direct materials …………………………………… $16 $16 $16
V
2. b. The variable costing income statements appears below:
Y
ear
1
Y
ear
2
Y
ear
3
Sales …………………………………………………………….. $2,700,000 $2,475,000 $2,925,000
V
ariable cost of
g
oods sold (@ $25 per unit) ………….. 1,500,000 1,375,000 1,625,000
Contribution mar
g
in ………………………………………….. 1,200,000 1,100,000 1,300,000
Fixed expenses:
T
© The McGraw-Hill Companies, Inc., 2018. All rights reserved.
Solutions Manual, Appendix 6A 81
Problem 6A-4 (continued)
3. The net operating incomes are reconciled as follows:
Y
ear
1
Y
ear
2
Y
ear
3
Units in be
g
innin
g
inventory…………………… 0 0 5,000
+ Units produced ……………………………..…. 60,000 60,000 60,000
Y
ear
1
Y
ear
2
Y
ear
3
Direct labor cost in endin
g
inventory (5,000
units × $9 per unit) …………………………… $ 0 $45,000 $ 0
Deduct: Direct labor cost in be
g
innin
g
Y
ear
1
Y
ear
2
Y
ear
3
Super-
v
ariable costin
g
net operatin
g
income
(loss) ……………………………………………… $8,000 $(137,000) $153,000
A
dd: Direct labor deferred in inventory
V
© The McGraw-Hill Companies, Inc., 2018. All rights reserved.
82 Managerial Accounting, 16th Edition
Problem 6A-5 (45 minutes)
1. a. The unit product cost under super-variable costing would include
b. The super-variable costing income statement would be:
Sales (18,000 units × $55 per unit)……….. $990,000
V
ariable cost of
g
oods sold
g
g
g
g
2. a. The unit product cost under variable costing would be:
Direct materials …………………………………………………… $19.00
V
b. The variable costing income statement would be:
Sales (18,000 units × $55 per unit)……….. $990,000
Variable cost of
g
oods sold
(18,000 units × $31.50 per unit) ………. 567,000
Contribution mar
g
in …………………………… 423,000
Fixed expenses:
Fixed manufacturin
g
overhead …………… $300,000
Fixed sellin
g
and administrative expense . 90,000 390,000
Net operatin
g
income …………………………. $ 33,000
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Solutions Manual, Appendix 6A 83
Problem 6A-5 (continued)
3. a. The unit product cost under absorption costing would be:
Direct materials …………………………………………………… $19.00
b. The absorption costing income statement would be:
Sales (18,000 units × $55 per unit)…………………….. $990,000
4. The difference between the super-variable costing and variable costing
Units in ending inventory = Units in beginning inventory + Units
Direct labor cost deferred in (released from) inventory = Direct labor
cost in ending inventory – Direct labor cost in beginning inventory
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84 Managerial Accounting, 16th Edition
Problem 6A-5 (continued)
4. The difference between the super-variable costing and absorption
costing net operating incomes is explained as follows:
Direct labor and fixed manufacturing overhead cost deferred in
(released from) inventory = Direct labor and fixed manufacturing
Super-variable costin
g
net operatin
g
income ………… $ 8,000
A
dd direct labor and fixed manufacturin
g
overhead
A