Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Bracey Company manufactures and sells one product. The following information pertains to the companys first year of operations: Variable cost per unit: Direct materials $

Bracey Company manufactures and sells one product. The following information pertains to the companys first year of operations:

Variable cost per unit:
Direct materials $ 25
Fixed costs per year:
Direct labor $ 310,500
Fixed manufacturing overhead $ 358,800
Fixed selling and administrative expenses $ 60,000

The company does not incur any variable manufacturing overhead costs or variable selling and administrative expenses. During its first year of operations, Bracey produced 23,000 units and sold 21,500 units. The selling price of the companys product is $59 per unit.

Required:

1. Assume the company uses super-variable costing:

a. Compute the unit product cost for the year.

b. Prepare an income statement for the year.

2. Assume the company uses a variable costing system that assigns $13.50 of direct labor cost to each unit produced:

a. Compute the unit product cost for the year.

b. Prepare an income statement for the year.

3. Assume the company uses an absorption costing system that assigns $13.50 of direct labor cost and $15.60 of fixed manufacturing overhead cost to each unit produced:

a. Compute the unit product cost for the year.

b. Prepare an income statement for the year.

4a. Reconcile the difference between the super-variable costing and variable costing net operating incomes.

4b. Reconcile the difference between the super-variable costing and absorption costing net operating incomes.

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

Client Acceptance And Retention Decisions Of Audit Firms In Nigeria

Authors: Richard Iyere Oghuma

1st Edition

6138946715, 978-6138946717

More Books

Students also viewed these Accounting questions