1. Whitehall Companysells a single product for $25. It had no beginning inventories.Operating data follow.
Sales, 27,000units $675,000
Normalcapacity 30,000 units
Production costs:
Variable perunit $13
Fixedproduction $150,000
Selling andadministrative expenses:
Variable per unitsold $2
Fixedselling $20,000
Number of unitsproduced 32,500 units
Assume the actualcosts were as budgeted.
a.Find contributionmargin per unit.
b.Compute the endinginventory under standard variable costing.
c.Compute the incomeunder standard variable costing.
Assume standardabsorption costing using normal capacity as the basis for computingthe standard fixed cost per unit. Compute
d.Standard grossprofit per unit.
e.Endinginventory.
f.Volume variance.
g.Income.
2. Lund Company sellsa single product for $25. It had no beginning inventories.Operating data follow.
Sales, 55,000units $1,375,000
Normalcapacity 60,000 units
Production costs:
Variable perunit $13
Fixedproduction $300,000
Selling andadministrative expenses:
Variable per unitsold $2
Fixedselling $40,000
Number of unitsproduced 66,000 units
Assume the actualcosts were as budgeted.
a. Compute incomeunder standard variable costing.
b. Compute incomeunder standard absorption costing.
3. Maiden Rock Companysells a single product for $25. It had no beginning inventories.Operating data follow.
Sales, 20,000units $500,000
Normalcapacity 30,000 units
Production costs:
Variable perunit $13
Fixedproduction $150,000
Selling andadministrative expenses:
Variable per unitsold $2
Fixedselling $20,000
Number of unitsproduced 32,500 units
Assume the actualcosts were as budgeted.
a.Find Maiden Rock’sincome under standard variable costing.
b.Find Maiden Rock’sincome under standard absorption costing.
