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Problem 8-34 Student:_________________________________
Class:___________________________________
SOLUTION
1.
Predetermined fixed overhead rate (per unit) * per unit
Standard Cost per unit
Direct Material *
Direct Labor *
Variable Overhead *
Standard cost per unit under variable costing *
Fixed overhead per unit under absorption costing *
Standard cost per unit under absorption costing *
2.a
ABSORPTION-COSTING INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 20X4
Sales Revenue *
Less: Cost of Goods Sold at standard absorption cost of $0 per unit *
Gross Margin *
Less: Selling and Administrative Expenses
Variable at per unit *
Fixed *
Net Income *
2.b
Sales Revenue *
Less: Variable Expenses
Variable manufacturing costs *
Variable selling and administrative costs *
Contribution Margin *
Less: Fixed Expenses
Fixed manufacturing overhead *
Fixed selling and administrative expenses *
Net Income *
3.
Cost of goods sold under absorption costing *
Less: Variable manufacturing costs under variable costing *
Subtotal *
Less: Fixed Manufacturing overhead as period expense
under variable costing *
Total *
Net Income under variable costing *
Less: Net Income under absorption costing *
Difference in net income *
4.
Difference in reported net income *
As shown in requirement (2), reported net income is * lower under * costing.
SKINNY DIPPERS, INC.
SKINNY DIPPERS, INC.
VARIABLE-COSTING INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 20X4
Problem 8-34
Student Name:_________________________________
Instructor
Class:___________________________________
McGraw-Hill Irwin
DATA INPUT
Sales Price 30$
Direct Material 10$
SOLUTION
1.
Predetermined fixed overhead rate (per unit) 4$
Standard Cost per unit
2.a
Sales Revenue 3,750,000$
2.b
Sales Revenue 3,750,000$
Net Income 300,000$
3.
Cost of goods sold under absorption costing 3,000,000$
VARIABLE-COSTING INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 20X4
SKINNY DIPPERS, INC.
ABSORPTION-COSTING INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 20X4
SKINNY DIPPERS, INC.
Problem 8-34
Student Name:_________________________________
Instructor
Class:___________________________________
McGraw-Hill Irwin
DATA INPUT
Sales Price 30$
Direct Material 10$
SOLUTION
1.
Predetermined fixed overhead rate (per unit) 4$
2.a
2.b
Sales Revenue 3,750,000$
Less: Variable Expenses
3.
Cost of goods sold under absorption costing 3,000,000$
Less: Variable manufacturing costs under variable costing 2,500,000$
Difference in net income (100,000)$
4.
Difference in reported net income 100,000$
FOR THE YEAR ENDED DECEMBER 31, 20X4
SKINNY DIPPERS, INC.
ABSORPTION-COSTING INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 20X4
SKINNY DIPPERS, INC.
VARIABLE-COSTING INCOME STATEMENT
