Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

CBA is a division of Flynn, Inc. The division manufactures and sells a pump that is used in a wide variety of applications. During the

CBA is a division of Flynn, Inc. The division manufactures and sells a pump that is used in a wide variety of applications. During the coming year, it expects to sell 30,000 units for $25 per unit. Raad Ali, division manager, is considering producing either 30,000 or 40,000 units during the period. Other information is presented in the schedule below:

Division Information 2016

Beginning inventory0

Expected sales in units30,000

Selling price per unit$25

Variable manufacturing cost per unit$7

Fixed manufacturing overhead costs (total)$480,000

Fixed manufacturing overhead costs per unit

Based on 30,000 units ($480,000 30,000)$16

Based on 40,000 units ($480,000 40,000)$12

Manufacturing cost per unit

Based on 30,000 units ($7 variable + $16 fixed)$23

Based on 40,000 units ($7 variable + $12 fixed)$19

Selling and administrative expenses (all fixed)$25,000

Instructions

Prepare a variable costing income statement with one column showing the results if 30,000 units are produced and one column showing the results if 40,000 units are produced.

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

Computerized Accounting With QuickBooks 2014

Authors: Kathleen Villani, James B. Rosa, Blanche Ettinger

1st Edition

0763860239, 9780763860233

More Books

Students also viewed these Accounting questions