80.2K

Verified Solution

Link Copied!

The EG Company produces and sells single product. The following data refer to the year just completed:

Beginning inventory		0
Units produced		34,000
Units sold		28,700
Selling price per unit	$	409
Selling and administrative expenses:
Variable per unit	$	18
Fixed (total)	$	602,700
Manufacturing costs:
Direct materials cost per unit	$	252
Direct labor cost per unit	$	55
Variable manufacturing overhead cost per unit	$	32
Fixed manufacturing overhead (total)	$	646,000

Assume that direct labor is a variable cost.

Required:

a.	Compute the cost of a single unit of product under both the absorption costing and variable costing approaches. (Omit the "$" sign in your response.)

	Cost per unit
Absorption costing	$
Variable costing	$

b.	Prepare an income statement for the year using absorption costing. (Input all amounts as positive values except losses which should be indicated by a minus sign. Omit the "$" sign in your response.)

	$

c.	Prepare a contribution format income statement for the year using variable costing. (Input all amounts as positive values except losses which should be indicated by a minus sign. Omit the "$" sign in your response.)

Variable Costing Income Statement
		$

d.	Reconcile the absorption costing and variable costing net operating income figures in (b) and (c) above. (Omit the "$" sign in your response.)

$

2. Nesman Company, which has only one product, has provided the following data concerning its most recent month of operations: Selling price $ 125 Units in beginning inventory 395 Units produced 6,210 Units sold 6,420 Units in ending inventory 185 Variable costs per unit: Direct materials $ 47 Direct labor $ 24 Variable manufacturing overhead $ 3 Variable selling and administrative $ 18 Fixed costs: Fixed manufacturing overhead $ 105,570 Fixed selling and administrative $ 89,880 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. Prepare a contribution format income statement for the month using variable costing. (Input all amounts as positive values except losses which should be indicated by a minus sign. Omit the "$" sign in your response.) Unit product cost under variable costing: Direct materials $ Direct labor Variable manufacturing overhead Variable costing unit product cost $ Variable Costing Income Statement b. Prepare an income statement for the month using absorption costing. (Input all amounts as positive values except losses which should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.) Unit product cost under absorption costing: Direct materials $ Direct labor Variable manufacturing overhead Fixed manufacturing overhead cost Absorption costing unit product cost $ Absorption Costing Income Statement $

Answer & Explanation Solved by verified expert

See Answer