Question
Baird Manufacturing pays its production managers a bonus based on the company's profitability. During the two most recent years, the company maintained the same cost
Baird Manufacturing pays its production managers a bonus based on the company's profitability. During the two most recent years, the company maintained the same cost structure to manufacture its products.
Year Units Produced Units Sold Production and Sales
20184,0004,000
20196,0004,000
Cost Data
Direct materials$ 13.4 per unit
Direct labor$ 22.4 per unit
Manufacturing overheadvariable$ 11.2 per unit
Manufacturing overheadfixed$ 103,800
Variable selling and administrative expenses$ 8.0 per unit sold
Fixed selling and administrative expenses$ 56,000
(Assume that selling and administrative expenses are associated with goods sold.)
Levine sells its products for $108.0 per unit.
Required
- Prepare income statements based on absorption costing for 2018 and 2019. (Prepare income statements based on absorption costing for 2018 and separate for 2019. (Do not round intermediate calculations.)
- Since Levine sold the same number of units in 2018 and 2019, why did net income increase in 2019? (did it: Decrease in fixed manufacturing cost, decrease in selling and administrative fixed cost, or increase in selling price?
- Determine the costs of ending inventory for 2019.
- Prepare income statements based on variable costing for 2018 and 2019.
***Can you solve in the following format? The categories for #1 are as follows:****
Revenues:
Cost of Goods Sold:
Direct Materials:
Direct Labor:
Manufacturing Overhead:
Selling & Administrative:
Gross Margin:
Operating Expenses:
Selling & Administrative Expenses:
Net Income:
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