Summer Fun Inc., produces and sells many recreational products. The company has just opened a new plant to produce Kerosene Lanterns that will be marketed throughout the United States. Thfollowing cost and revenue data relate to February, the first month of the plant's operation:Direct MaterialDirect LaborVariable MOHVariable Selling & AdminFixed MOHFixed Selling & Admin$8 Units Produced$5 Units Sold$2$3$60,000$80,00012,00010,000Determine the per unit cost under both variable costing and absorption costing and prepare the income statement for each costing methodPrice per unit is $33

ABSORPTION COSTINGAbsorption Costing is a Cost Management Accounting method in which all costs…

Answered: Summer Fun Inc., produces and sells…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 28P: Brody Company makes industrial cleaning solvents. Various chemicals, detergent, and water are mixed...

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High Country, Inc., produces and sells many recreational products. The company has just opened a new plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month of the plant’s operation: Beginning inventory 0 Units produced 10,000 Units sold 8,000 Selling price per unit $ 75 Selling and administrative expenses: Variable per unit $ 6 Fixed (per month) $ 200,000 Manufacturing costs: Direct materials cost per unit $ 20 Direct labor cost per unit $ 8 Variable manufacturing overhead cost per unit $ 2 Fixed manufacturing overhead cost (per month) $ 100,000 Management is anxious to assess the profitability of the new camp cot during the month of May. Compute: 1. Let's say that the company uses absorption costing. a. Calculate the unit product cost. b. Compute an income statement for May. 2. Let's say that the company uses variable costing. a. Calculate…
High Country, Incorporated, produces and sells many recreational products. The company has just opened a new plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month of the plant’s operation: Beginning inventory 0 Units produced 48,000 Units sold 43,000 Selling price per unit $ 82 Selling and administrative expenses: Variable per unit $ 3 Fixed (per month) $ 557,000 Manufacturing costs: Direct materials cost per unit $ 15 Direct labor cost per unit $ 6 Variable manufacturing overhead cost per unit $ 3 Fixed manufacturing overhead cost (per month) $ 816,000 Management is anxious to assess the profitability of the new camp cot during the month of May. Required: 1. Assume that the company uses absorption costing. a. Calculate the unit product cost. b. Prepare an income statement for May. 2. Assume that the company uses variable costing. a. Calculate the…
High Country, Inc., produces and sells many recreational products. The company has just opened a new plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month of the plant’s operation: Beginning inventory 0 Units produced 42,000 Units sold 37,000 Selling price per unit $76 Selling and administrative expenses: Variable per unit $3 Fixed (per month) $ 557,000 Manufacturing costs: Direct materials cost per unit $16 Direct labor cost per unit $9 Variable manufacturing overhead cost per unit $1 Fixed manufacturing overhead cost (per month) $ 672,000 Management is anxious to see how profitable the new camp cot will be and has asked that an income statement be prepared for May. Required: 1. Assume that the company uses absorption costing. a. Determine the unit product cost. Unit product…
High Country, Incorporated, produces and sells many recreational products. The company just opened a new plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month of the plant's operation: Beginning inventory 0 Units produced 48, 000 Units sold 43,000 Selling price per unit $ 85 Selling and administrative expenses: Variable per unit $ 3 Fixed (per month) $ 565, 000 Manufacturing costs: Direct materials cost per unit $ 18 Direct labor cost per unit $ 9 Variable manufacturing overhead cost per unit $ 2 Fixed manufacturing overhead cost (per month) $ 912, 000 Required: Assume the company uses absorption costing. Calculate the camp cot's unit product cost. Prepare an income statement for May. Assume the company uses variable costing. Calculate the camp cot's unit product cost. Prepare a contribution format income statement for May.
High Country, Inc., produces and sells many recreational products. The company has just opened a new plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month of the plant’s operation: Beginning inventory 0 Units produced 46,000 Units sold 41,000 Selling price per unit $ 79 Selling and administrative expenses: Variable per unit $ 3 Fixed (per month) $ 562,000 Manufacturing costs: Direct materials cost per unit $ 15 Direct labor cost per unit $ 8 Variable manufacturing overhead cost per unit $ 3 Fixed manufacturing overhead cost (per month) $ 828,000 Management is anxious to assess the profitability of the new camp cot during the month of May. Required: 1. Assume that the company uses absorption costing. a. Determine the unit product cost. b. Prepare an income statement for May. 2. Assume that the company uses variable costing. a.…
High Country, Inc., produces and sells many recreational products. The company has just opened a new plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month of the plant’s operation: Beginning inventory 0 Units produced 46,000 Units sold 41,000 Selling price per unit $ 79 Selling and administrative expenses: Variable per unit $ 3 Fixed (per month) $ 562,000 Manufacturing costs: Direct materials cost per unit $ 15 Direct labor cost per unit $ 8 Variable manufacturing overhead cost per unit $ 3 Fixed manufacturing overhead cost (per month) $ 828,000 Management is anxious to assess the profitability of the new camp cot during the month of May. Required: 1. Assume that the company uses absorption costing. a. Determine the unit product cost. b. Prepare an income statement for May. 2. Assume that the company uses variable costing. a.…
High Country, Inc., produces and sells many recreational products. The company has just opened a new plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month of the plant’s operation: Beginning inventory 0 Units produced 42,000 Units sold 37,000 Selling price per unit $ 76 Selling and administrative expenses: Variable per unit $ 3 Fixed (per month) $ 560,000 Manufacturing costs: Direct materials cost per unit $ 16 Direct labor cost per unit $ 7 Variable manufacturing overhead cost per unit $ 4 Fixed manufacturing overhead cost (per month) $ 672,000 Management is anxious to assess the profitability of the new camp cot during the month of May. Required: 1. Assume that the company uses absorption costing. a. Calculate the unit product cost. b. Prepare an income statement for May. 2. Assume that the company uses variable costing. a.…
High Country, Inc., produces and sells many recreational products. The company has just opened a new plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month of the plant’s operation: Beginning inventory 0 Units produced 37,000 Units sold 32,000 Selling price per unit $ 83 Selling and administrative expenses: Variable per unit $ 2 Fixed (per month) $ 559,000 Manufacturing costs: Direct materials cost per unit $ 14 Direct labor cost per unit $ 6 Variable manufacturing overhead cost per unit $ 2 Fixed manufacturing overhead cost (per month) $ 740,000 Management is anxious to assess the profitability of the new camp cot during the month of May. 1. Assume that the company uses variable costing. a. Calculate the unit product cost. b. Prepare a contribution format income statement for May.
High Country, Inc., produces and sells many recreational products. The company has just opened a new plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month of the plant’s operation: Beginning inventory 0 Units produced 45,000 Units sold 40,000 Selling price per unit $ 81 Selling and administrative expenses: Variable per unit $ 2 Fixed (per month) $ 561,000 Manufacturing costs: Direct materials cost per unit $ 15 Direct labor cost per unit $ 9 Variable manufacturing overhead cost per unit $ 2 Fixed manufacturing overhead cost (per month) $ 720,000 Management is anxious to assess the profitability of the new camp cot during the month of May. 2. Assume that the company uses variable costing. b. Prepare a contribution format income statement for May. Prepare a contribution format income statement for May. Assume that the…
High Country, Inc., produces and sells many recreational products. The company has just opened a new plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month of the plant’s operation: Beginning inventory 0 Units produced 45,000 Units sold 40,000 Selling price per unit $ 81 Selling and administrative expenses: Variable per unit $ 2 Fixed (per month) $ 561,000 Manufacturing costs: Direct materials cost per unit $ 15 Direct labor cost per unit $ 9 Variable manufacturing overhead cost per unit $ 2 Fixed manufacturing overhead cost (per month) $ 720,000 Management is anxious to assess the profitability of the new camp cot during the month of May. Required: 1. Assume that the company uses absorption costing. a. Determine the unit product cost. b. Prepare an income statement for May. 2. Assume that the company uses variable costing. a.…
High Country, Incorporated, produces and sells many recreational products. The company just opened a new plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month of the plant's operation: Beginning inventory Units produced Units sold Selling price per unit Selling and administrative expenses: Variable per unit Fixed (per month) Manufacturing costs: Direct materials cost per unit Direct labor cost per unit Variable manufacturing overhead cost per unit Fixed manufacturing overhead cost (per month) Required: 1. Assume the company uses absorption costing. a. Calculate the camp cot's unit product cost. b. Prepare an income statement for May. 2. Assume the company uses variable costing. a. Calculate the camp cot's unit product cost. b. Prepare a contribution format income statement for May. 0 46,000 41,000 $83 $4 $ 565,000 $ 16 $ 8 $1 $ 782,000 Complete this question by entering your answers in…
Wiengot Antennas, Inc., produces and sells a unique type of TV antenna. The company has just opened a new plant to manufacture the antenna, and the following cost and revenue data have been provided for the first month of the plant’s operation.Beginning inventory 0 Units produced 50,000 Units sold 45,000 Selling price per unit $76 Selling and administrative expenses:Variable per unit $3 Fixed (total) $567,000 Manufacturing costsDirect materials cost per unit $15 Direct labor cost per unit $7 Variable manufacturing overhead cost per unit $3 Fixed manufacturing overhead cost (total) $900,000. on the basis of aborption costing.Determine the unit product cost. Prepare an income statement for the month. on the basis of variable costing. Determine the unit product cost. Prepare an contribution formate income statement for the month.

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