ACC 202: Managerial Accounting (4226_E0Z1)

chapter 19

3.Rey Companys only product sells for $227 per unit. Data for its first year of operations follow.

Direct materials	$ 31	per unit
Direct labor	$ 39	per unit
Variable overhead	$ 13	per unit
Fixed overhead	$ 420,000	per year
Variable selling and administrative expenses	$ 29	per unit
Fixed selling and administrative expenses	$ 222,000	per year
Units produced and sold	28,000	units

1. Prepare an income statement for the year using absorption costing 2. Prepare an income statement for the year using variable costing.

Prepare an income statement for the year using variable costing.

Prepare an income statement for the year using absorption costing.

REY COMPANY
Income Statement (Absorption Costing)
	0
	$0

REY COMPANY
Income Statement (Variable Costing)
		0
		0
Income

4. Jax Incorporated reports the following data for its only product. The company had no beginning finished goods inventory and it uses absorption costing.

Sales price	$ 57.70	per unit
Direct materials	$ 10.70	per unit
Direct labor	$ 8.20	per unit
Variable overhead	$ 12.70	per unit
Fixed overhead	$ 1,316,700	per year

1. Compute gross profit assuming (a) 77,000 units are produced and 77,000 units are sold and (b) 114,000 units are produced and 77,000 units are sold. 2. By how much would the companys gross profit increase or decrease from producing 37,000 more units than it sells?

Compute gross profit assuming (a) 77,000 units are produced and 77,000 units are sold and (b) 114,000 units are produced and 77,000 units are sold.

	(a) 77,000 Units Produced and 77,000 Units Sold	(b) 114,000 Units Produced and 77,000 Units Sold
Gross profit

By how much would the companys gross profit increase or decrease from producing 37,000 more units than it sells?

Gross profit

by