Accounting Chapter 8 Homework Sales Revenue Less Variable Manufacturing Costs Standard

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DATA INPUT

Sales Price 30$

Direct Material 10$

Direct Labor 4$

Variable Overhead 6$

Budgeted Fixed Overhead 600,000$

Actual Production (containers) 150,000

Units Sold 125,000

Selling & Administrative Expenses

Fixed $100,000 (for the year)

Variable $2 (per container sold)

SOLUTION

2.a

Sales Revenue 3,750,000$

Less: Cost of Goods Sold at standard absorption cost of $24 per unit 3,000,000

2.b

Sales Revenue 125000 units sold at $30 per unit 3,750,000$

Less: Variable Manufacturing costs at standard variable cost of $20 per unit 2,500,000

VARIABLE-COSTING OPERATING INCOME STATEMENT

FOR THE YEAR ENDED DECEMBER 31, 20x4

SKINNY DIPPERS, INC.

ABSORPTION-COSTING OPERATING INCOME STATEMENT

FOR THE YEAR ENDED DECEMBER 31, 20x4

SKINNY DIPPERS, INC.

Less: Variable manufacturing costs under variable costing 2,500,000

Subtotal 500,000$

Less: Fixed Manufacturing overhead as period expense

under variable costing 600,000