DC and Marvel would like to evaluate one of the product lines that they sell to defense department. Every month the Company produce an identical number of units, although the sales in units differ from month to month. Selling price Units in beginning inventory Units produced Units sold Variable costs per unit: Direct materials Direct labour Variable manufacturing overhead Variable selling and administrative A $111 400 8,800 8,900 $34 $37 $3 $9 Fixed costs: Fixed manufacturing overhead $61,600 Fixed selling and administrative $169,100 Required: B 109 360 6900 7200 29 31 2 7 53,500 145,000 1. Compute the total Contribution Margin. 2. Compute the Operating Income under Variable Costing. 3. Prepare reconciliation from your Variable Costing Operating Income to compute Operating Income under absorption costing.
DC and Marvel would like to evaluate one of the product lines that they sell to defense department. Every month the Company produce an identical number of units, although the sales in units differ from month to month. Selling price Units in beginning inventory Units produced Units sold Variable costs per unit: Direct materials Direct labour Variable manufacturing overhead Variable selling and administrative A $111 400 8,800 8,900 $34 $37 $3 $9 Fixed costs: Fixed manufacturing overhead $61,600 Fixed selling and administrative $169,100 Required: B 109 360 6900 7200 29 31 2 7 53,500 145,000 1. Compute the total Contribution Margin. 2. Compute the Operating Income under Variable Costing. 3. Prepare reconciliation from your Variable Costing Operating Income to compute Operating Income under absorption costing.
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter3: Cost Behavior And Cost Forecasting
Section: Chapter Questions
Problem 54E: Income Statements under Absorption and Variable Costing In the coming year, Kalling Company expects...
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Transcribed Image Text:DC and Marvel would like to evaluate one of the product lines that they sell to defense department.
Every month the Company produce an identical number of units, although the sales in units differ from
month to month.
Selling price
Units in beginning inventory
Units produced
Units sold
Variable costs per unit:
Direct materials
Direct labour
Variable manufacturing
overhead
Variable selling and
administrative
A
$111
400
8,800
8,900
$34
$37
$3
$9
Fixed costs:
Fixed manufacturing overhead
$61,600
Fixed selling and administrative $169,100
Required:
B
109
360
6900
7200
29
31
2
7
53,500
145,000
1. Compute the total Contribution Margin.
2. Compute the Operating Income under Variable Costing.
3. Prepare reconciliation from your Variable Costing Operating Income to compute Operating Income
under absorption costing.
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