Exercise 2 (Variable and Absorption Costing Unit Product Costs)Super Bicycle produces an inexpensive yet rugged bicycle for P5,000.Selected data for the company's operations last year follow:Units in beginning inventory...Units produced...Units sold. ..Units in ending inventory...ㅇ10,0008,0002,000Variable costs per unit:Direct materials..Direct labor ....Variable manufacturing overheadVariable selling and administrativeFixed costs:P1,2001,400500200Fixed manufacturing overhead...Fixed selling and administrative...P6,000,000P4,000,000Required:1. Assume that the company uses absorption costing. Compute the unitproduct cost for one bicycle.2. Assume that the company uses variable costing. Compute the unit productcost for one bicycle.

Variable cost includes all costs that vary directly with the volume of output. That is, variable…

Required: Assume that the company uses absorption costing. Compute the unt product cost for one bicycle. E. Assume that the company uses variable costing. Compute the unit product cost for one bicycle.

Required: Assume that the company uses absorption costing. Compute the unt product cost for one bicycle. E. Assume that the company uses variable costing. Compute the unit product cost for one bicycle.

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 66P: Variable-Costing and Absorption-Costing Income Borques Company produces and sells wooden pallets...

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Exercise 2 (Variable and Absorption Costing Unit Product Costs) Super Bicycle produces an inexpensive yet rugged bicycle for P5,000. Selected data for the company's operations last year follow: Units in beginning inventory.. Units produced.. Units sold. Units in ending inventory.. 10,000 8,000 2,000 Variable costs per unit: Direct materials. P1,200 1,400 500 200 Direct labor Variable manufacturing overhead. Variable selling and administrative Fixed costs: Fixed manufacturing overhead Fixed selling and administrative... P6,000,000 P4,000,000 Required: 1. Assume that the company uses absorption costing. Compute the unit product cost for one bicycle. 2. Assume that the company uses variable costing. Compute the unit product cost for one bicycle.
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