Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

#21 Need fixing please Santana Rey expects sales of Business Solutions' line of computer workstation furniture to equal 300 workstations (at a sales price of

#21 Need fixing please

image text in transcribed

image text in transcribed

image text in transcribed

image text in transcribed

Santana Rey expects sales of Business Solutions' line of computer workstation furniture to equal 300 workstations (at a sales price of $3,600 each) for 2021. The workstations' manufacturing costs include the following. Direct materials Direct labor Variable overhead Fixed overhead $ 780 per unit $ 350 per unit $ 70 per unit $ 14,400 per year Selling and administrative expenses for these workstations follow. Variable Fixed $ 35 per unit $3,600 per year Santana is considering how many workstations to produce in 2021. She is confident that she will be able to sell any workstations in her 2021 ending inventory during 2022. However, Santana does not want to overproduce as she does not have sufficient storage space for many more workstations. Required: 1. Complete the following income statements using absorption costing. 2. Complete the following income statements using variable costing. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Complete the following income statements using absorption costing. Product cost per unit - Absorption costing Production volume 300 320 workstations workstations S 780 780 350 350 70 70 Direct materials per unit Direct labor per unit Variable overhead per unit Fixed overhead per unit Product cost per unit - Absorption costing Number of workstations sold Total cost of goods sold 48 45 $ 1,248 $ 1,245 300 300 $ 374,400 $ 373,500 BUSINESS SOLUTIONS Income Statements (Absorption Costing) Production volume Sales volume - 300 Workstations 300 320 workstations workstations Sales $ 1,080,000 $ 1,080,000 Cost of goods sold (374,400) (373,500) Gross profit 705,600 706,500 Selling and administrative expenses 14,100 14,100 $ 691,500 $ 692,400 Under absorption costing, can the difference between production volume and Yes sales volume affect the reported net income (loss)? A Complete the following income statements using variable costing. BUSINESS SOLUTIONS Income Statements (Variable Costing) 300 Production volume (units) workstations 300 Sales volume (units) workstations Sales $ 1,080,000 Less: Cost of goods sold Direct materials 234,000 Direct labor 105,000 320 workstations 300 workstations S 1,080,000 234,000 105,000 741,000 741,000 Fixed overhead costs 14,400 14,400 Fixed selling and administrative expenses Fixed selling and administrative expenses Income 3,600 (691,500) 67 500 $ 3,600 (691,500) 67 500 Under variable costing, can a company increase its net

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting Information Systems

Authors: James A. Hall

5th Edition

0324312954, 9780324312959

More Books

Students also viewed these Accounting questions

Question

How do you add two harmonic motions having different frequencies?

Answered: 1 week ago

Question

Explain why Sheila, not Pete, should make the selection decision.

Answered: 1 week ago