Question
ABC Enterprises, which began operations on January 1 of 2018, produces scooters for kids. The beginning inventory of scooters for ABC is thus zero. The
ABC Enterprises, which began operations on January 1 of 2018, produces scooters for kids. The beginning inventory of scooters for ABC is thus zero. The companys staff accidentally deleted some information from accounting records. Information related to activities in 2018 is as follows:
Beginning Inventory of scooters | 0 |
Number of scooters produced | 4,000 units |
Number of scooters sold | 3,000 units |
Sales Revenue | $261,000 |
Variable Costs | |
Direct Materials | $15.00/unit produced |
Direct Labor | $20.00/unit produced |
Variable Manufacturing Overhead | $10.00/unit produced |
Variable Selling and Administrative (S&A) | $11.00/unit sold |
Annual Fixed costs | |
Fixed manufacturing OH | $12.00/unit produced |
Fixed SnA | $13,000 |
Net income under variable costing | $33,000 |
Net income under absorption costing | $45,000 |
1. Using the absorption costing system, what is ABCs cost of goods sold during 2018?
2. Using the absorption costing system, what is ABC's dollar value of ending finished goods inventory in 2018?
3. Using absorption costing what is ABCs Net Operating Income before taxes for 2018?
4. What is ABCs total contribution margin on scooters sold for 2018?
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