Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

#21 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

#21

image text in transcribed

image text in transcribed

image text in transcribed

image text in transcribed

image text in transcribed

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. Required 1 Required 2 Complete the following income statements using absorption costing. Product cost per unit - Absorption costing Production volume 300 320 workstations workstations Product cost per unit - Absorption costing Number of workstations sold Total cost of goods sold BUSINESS SOLUTIONS Income Statements (Absorption Costing) Production volume 300 320 Sales volume - 300 Workstations workstations workstations Under absorption costing, can the difference between production volume and sales volume affect the reported net income (loss)? Product cost per unit - Absorption costing workstations Direct labor per unit Direct materials per unit Fixed overhead per unit Fixed selling and administrative expenses Direct materials per unit Fixed overhead per unit Fixed selling and administrative expenses Variable overhead per unit Variable selling and administrative expenses Complete the following income statements using variable costing. BUSINESS SOLUTIONS Income Statements (Variable Costing) 300 Production volume (units) workstations Sales volume (units) 320 workstations Contribution margin Gross margin Net income Net loss ( Amer Contribution margin Gross margin Net income Net loss Sales Under variable costing, can a company increase its net income by increasing production?

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

Step: 3

blur-text-image

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

General Accounting Financial Accounting

Authors: Bbc Kikumbi Mwepu

1st Edition

6206329488, 978-6206329480

More Books

Students also viewed these Accounting questions

Question

What advantages and disadvantages do bonds offer to investors?

Answered: 1 week ago

Question

Explain the nature of human resource management.

Answered: 1 week ago

Question

Write a note on Quality circles.

Answered: 1 week ago

Question

Describe how to measure the quality of work life.

Answered: 1 week ago