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    4 and 5

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    Mela carlon
    - Units sold were 60,000 and net sales were $1,400,000 - Variable cost of goods manufactured was $630,000 and fixed was $315,000 - 70,000 units were manufactured - Variable operating expenses were $98,000 and fixed were $140,000 - Beginning finished goods inventory was $0

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    4 and 5

    Uploaded by

    Mela carlon
    764 views3 pages
    - Units sold were 60,000 and net sales were $1,400,000 - Variable cost of goods manufactured was $630,000 and fixed was $315,000 - 70,000 units were manufactured - Variable operating expenses were $98,000 and fixed were $140,000 - Beginning finished goods inventory was $0

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    Accounting Activity

    Original Title

    4 AND 5

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    - Units sold were 60,000 and net sales were $1,400,000 - Variable cost of goods manufactured was $630,000 and fixed was $315,000 - 70,000 units were manufactured - Variable operating expenses were $98,000 and fixed were $140,000 - Beginning finished goods inventory was $0

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    764 views3 pages

    4 and 5

    Uploaded by

    Mela carlon
    - Units sold were 60,000 and net sales were $1,400,000 - Variable cost of goods manufactured was $630,000 and fixed was $315,000 - 70,000 units were manufactured - Variable operating expenses were $98,000 and fixed were $140,000 - Beginning finished goods inventory was $0

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 3

    Units Sold 60,000

    Net Sales 1,400,000


    Cost of Goods Manufactured Variable 630,000
    Cost of Goods Manufactured Fixed 315,000
    Units Manufactured 70,000
    Operating Expenses: Variable 98,000
    Operating Expenses: Fixed 140,000
    FG Inventury, beg 0

    6. What would be Peter’s finished goods inventory cost at December 31,20CY, under the variable (direct)
    costing system?

    Solution:

    Variable (Direct) Costing

    Cost of Goods Manufactured 630,000


    Variable
    Units Manufactured 70,000
    Variable Production Cost per 9
    Unit
    Inventory, ending (70,000- 10,000
    60,000)
    Finished Goods Inventory Cost 90,000
    – Direct Costing
    B.) 90,000

    7. Under the absorption costing method, Peter’s operating income for 20CY, would be?

    Solution:

    Full (Absorption) Costing

    Cost of Goods Manufactured 630,000


    Variable
    Cost of Goods Manufactured 315,000 945,000
    Fixed
    Units Manufactured 70,000
    Variable Production Cost per 13.5
    Unit
    Inventory, ending (70,000- 10,000
    60,000)
    Finished Goods Inventory Cost 135,000
    – Absorption Costing

    Peter Company
    Income Statement

    For the Year Ended December 31,20CY

    (Absorption Costing)

    Sales 1,400,000
    Cost of Sales:
    Production Costs:
    Variable 630,000
    Fixed 315,000
    Total Production Costs 945,000
    Inventory, end 135,000 810,000
    (945,0000/70,000) *10000
    Gross Margin 590,000
    Selling and Administrative
    Expenses:
    Variable Selling and 98,000
    Administrative
    Fixed Selling and 140,000 238,000
    Administrative
    Net Income 352,000
    C. 352,000

    Items 11 and 12 are based on the following information:

    Units Produced 100,000


    Direct Materials 100,000
    Direct Labor 80,000
    Variable Manufacturing Overhead 40,000
    Fixed Manufacturing Overhead 50,000
    Variable Selling and General 12,000
    Fixed Selling and General 45,000

    11. What was Product Zee’s unit cost under absorption costing?

    Solution:

    Full (Absorption) Costing

    Direct Materials 100,000


    Direct Labor 80,000
    Variable Manufacturing 40,000
    Overhead
    Fixed Manufacturing Overhead 50,000 270,000
    Divide by Units Produced 100,000
    Full Production Cost per Unit 2.7
    B.) 2.70
    12. What was Product Zee’s unit cost under variable costing?

    Solution:

    Variable (Direct) Costing

    Direct Materials 100,000


    Direct Labor 80,000
    Variable Manufacturing 40,000 220,000
    Overhead
    Divide by Units Produced 100,000
    Full Production Cost per Unit 2.2
    D.) 2.20

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