Requirement 1. Compute the product cost per meal produced under absorption costing and under variable costing....
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Requirement 1. Compute the product cost per meal produced under absorption costing and under variable costing. Do this first for January and then for February. January February Total product cost Less: Requirement 2a. Prepare separate monthly income statements for January and for February, using absorption costing. Jason's Meals Income Statement (Absorption Costing) Month Ended Less: Absorption Variable Absorption costing costing costing Less: Less: Requirement 2b. Prepare Jason's Meals' January and February income statements using variable costing. Jason's Meals Contribution Margin Income Statement (Variable Costing) Month Ended Variable costing January 31 costs to the future In February, absorption costing operating income February 28 January 31 Requirement 3. Is operating income higher under absorption costing or variable costing in January? In February? Explain the pattern of differences in operating income based on absorption costing versus variable costing In January, absorption costing operating income variable costing income. This is because units produced were units sold. Absorption costing defers some of February 28 costs in the units of ending inventory. These costs will not be January's absorption costing income. variable costing operating income. This is because units produced were until those units are sold. Deferring these units sold for the month. Data table Sales..... Production.... January 1,000 meals 1,500 meals Variable manufacturing expense per meal.. Sales commission expense per meal.. Total fixed manufacturing overhead ... $900 Total fixed marketing and administrative expenses .. $700 Print $3 $1 Done February 1,400 meals 1,200 meals $3 $1 $900 $700 In February, absorption costing operating income As inventory costing income. variable costing operating income. This is because units produced were as was the case in this February, January's units sold for the month. costs that absorption costing assigned to that inventory are expensed in This February's absorption Requirement 1. Compute the product cost per meal produced under absorption costing and under variable costing. Do this first for January and then for February. January February Total product cost Less: Requirement 2a. Prepare separate monthly income statements for January and for February, using absorption costing. Jason's Meals Income Statement (Absorption Costing) Month Ended Less: Absorption Variable Absorption costing costing costing Less: Less: Requirement 2b. Prepare Jason's Meals' January and February income statements using variable costing. Jason's Meals Contribution Margin Income Statement (Variable Costing) Month Ended Variable costing January 31 costs to the future In February, absorption costing operating income February 28 January 31 Requirement 3. Is operating income higher under absorption costing or variable costing in January? In February? Explain the pattern of differences in operating income based on absorption costing versus variable costing In January, absorption costing operating income variable costing income. This is because units produced were units sold. Absorption costing defers some of February 28 costs in the units of ending inventory. These costs will not be January's absorption costing income. variable costing operating income. This is because units produced were until those units are sold. Deferring these units sold for the month. Data table Sales..... Production.... January 1,000 meals 1,500 meals Variable manufacturing expense per meal.. Sales commission expense per meal.. Total fixed manufacturing overhead ... $900 Total fixed marketing and administrative expenses .. $700 Print $3 $1 Done February 1,400 meals 1,200 meals $3 $1 $900 $700 In February, absorption costing operating income As inventory costing income. variable costing operating income. This is because units produced were as was the case in this February, January's units sold for the month. costs that absorption costing assigned to that inventory are expensed in This February's absorption
Expert Answer:
Answer rating: 100% (QA)
Requirement 1 January Absorption costing product cost per meal 3 9001500 360 Variable costing produc... View the full answer
Related Book For
Horngrens Financial and Managerial Accounting
ISBN: 978-0133866292
5th edition
Authors: Tracie L. Nobles, Brenda L. Mattison, Ella Mae Matsumura
Posted Date:
Students also viewed these accounting questions
-
The contribution margin income statement of Westlake Coffee for February follows: Westlake coffee sells three small coffees for every large coffee. A small coffee sells for $ 3.00, with a variable...
-
The contribution margin income statement of Margot Coffee for February follows: Margot Coffee sells three small coffees for every large coffee. A small coffee sells for $ 3.00, with a variable...
-
The contribution margin income statement of Extreme Coffee for February follows. Extreme Coffee sells three small coffees for every large coffee. A small coffee sells for $2, with a variable expense...
-
EG Corporation redeemed 200 shares of stock from one of its shareholders in exchange for $200,000. The redemption represented 20% of the corporation's outstanding stock. The redemption was treated as...
-
Consider a long bar of square cross section (0.8 m to the side) and of thermal conductivity 2 W/m K. Three of these sides are maintained at a uniform temperature of 300C. The fourth side is exposed...
-
A property is purchased for $70,000. The purchase is financed with a GPM carrying a 12 percent interest rate. A 7.5 percent rate of graduation will be applied to monthly payments beginning each year...
-
Cruz Manufacturing's sales slumped badly in 2002. For the first time in its his- tory, it operated at a loss. The company's income statement showed the following results from selling 600,000 units of...
-
BONDS ISSUED AT A PREMIUM, REDEEMED AT A LOSS Blackwell Company issued the following bonds at a premium: Date of issue and sale: .....March 1, 20-1 Principal amount: .......$500,000 Sale price of...
-
Using the financial data provided for Exxon Mobil Corporation, calculate the following financial ratios: Ratio Formula Value Operating Margin Operating Income / Revenue 20% Return on Assets (ROA) Net...
-
Read the case study of Almeada and baby Anne and answer the following questions: 1. What were the problems in living that Almeada and baby Anne experienced? 2. How did the human service delivery...
-
On December 1, Exotic Imports Inc. (EII) ordered a large supply of product from a supplier in Athens, Greece. The currency of Greece is the Euro Dollar (EUR). The total order was EUR 525,000, payable...
-
Describe the microsystem change, such as delayed in rapid response team that occurred and the implications that were realized on the meso- and macrosystems within the organization. What knowledge,...
-
Given the following information pulled from a firm's financial statements, what is their Asset Turnover ratio? (round to the nearest two decimal places; 1.037 = 1.04) Total Current 5,093,916...
-
Meat Packers, Incorporated (MPI) preserves and packages various kinds of meats for transportation to grocery stores. To prepare and transport each meat package to a grocery store, the firm must...
-
Find the vertex and focus of the parabola from the given equation and select its graph. 2x+y = 0 a. Vertex: (0,0) Focus: (-2, 0) : (-1/1, 0) -10 -8 -8 4 c. Vertex: (0,0) Focus: (0, 2) -2 10 8 6 2 -2...
-
5. (40 points) Program HW. Huffman source compression for two sequences. (a) (5 points) Generate Source A with length 1000 which is an IID sequence, each with X~ Bern(1/4) for Vt (b) (5 points)...
-
please ans me. Hendersons Ltd has just begun to revalue its plant and equipment. The following information about the items included in this class of non-current assets shows their carrying value, and...
-
The area of square PQRS is 100 ft2, and A, B, C, and D are the midpoints of the sides. Find the area of square ABCD. B A
-
Suppose on January 1, Antonios Tavern prepaid rent of $6,000 for the full year. At June 30, how much rent expense should be recorded for the period January 1 through June 30?
-
The account balances of Wilford Towing Service at June 30, 2016, follow Equipment...........$ 17,500 Office Supplies ........... 1,300 Notes Payable........... 6,900 Rent Expense........... 800...
-
Riverside Sporting Goods Store has the following sales budget: Suppose June sales are expected to be $82,000 rather than $66,000. Revise Riversides sales budget. RIVERSIDE SPORTING GOODS STORE Sales...
-
Identify several nonquantitative factors that are apt to play a decisive role in the final selection of projects for capital expenditures.
-
In what way does depreciation affect the analysis of cash flows for a proposed capital expenditure?
-
Why are the net present value and the internal rate of return models superior to the payback period and the accounting rate of return models?
Study smarter with the SolutionInn App