Makin & Byrd, Inc., which uses throughput costing, just completed its first year of operations. Planned and
Question:
Makin & Byrd, Inc., which uses throughput costing, just completed its first year of operations. Planned and actual production equaled 10,000 units, and sales totaled 9,600 units at 80perunit.Costdatafortheyear.areasfollows:Directimatehali(@erUmit)yeenelereekerceceatence 12 Conversion cost:
DINE CHAD iene ec adi at okas: oa noe ace ee aa 45,000 Variable manufacturing overhead .............. 65,000 Fixed manufacturing overhead................. 220,000 Selling and administrative costs:
Wana IG: (OSI UNNI erenccuees esunauentas tesa: emma 8 FeDKOCIA, Sank: arts oer petra cle p< gna ae ar em 118,000 The company classifies only direct material as a throughput cost.
Required
a. Compute the company’s total cost for the year assuming that variable manufacturing costs are driven by the number of units produced and that variable selling and administrative costs are driven by the number of units sold.
b. How much of this cost would be held in year-end inventory under (1) absorption costing, (2) variable costing, and (3) throughput costing?
c. How much of the company’s total cost for the year would be included as an expense on the period’s income statement under (1) absorption costing, (2) variable costing, and (3) throughput costing?
d. Prepare the company’s throughput-costing income statement.
Step by Step Answer:
Cost Management Strategies For Business Decisions
ISBN: 12
4th Edition
Authors: Ronald Hilton, Michael Maher, Frank Selto