Answered step by step
Verified Expert Solution
Question
1 Approved Answer
chapter 6 4 1 1 Problem 6-22 (Algo) Variable Costing Income Statements; Income Reconciliation (L06-1, LO6-2, LO6-3) 100 points Denton Company manufactures and sells a
chapter 6 4 1 1 Problem 6-22 (Algo) Variable Costing Income Statements; Income Reconciliation (L06-1, LO6-2, LO6-3) 100 points Denton Company manufactures and sells a single product. Cost data for the product are given: book 10 j References Variable costa per units Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Total variable cont per unit Fixed costa per month Fixed manufacturing overhead Tisted selling and administrative Total Fixed cost per month 10 $ 105,000 263.000 $ 268,000 The product sells for $48 per unit. Production and sales data for July and August, the first two months of operations, follow, July August Unito Produced 21.000 21,000 Unita Sold 17,000 25,000 The company's Accounting Department has prepared the following absorption costing income statements for July and Aug Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income July August $ 816,000 $1,200,000 357,000 525,000 459,000 675,000 197,000 213,000 $ 262,000 $ 462,000 Required: 1. Determine the unit product cost under: a. Absorption costing b. Variable costing 2. Prepare variable costing income statements for July and August. 3. Reconcile the variable costing and absorption costing net operating incomes. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Determine the unit product cost under: (a) Absorption costing, (b) Variable costing. Unit Product Cost a Absorption costing Variable costing b. Prepare variable costing income statements for July and August. Denton Company Variable Costing Income Statement July August Sales Variable expenses Variable cost of goods sold Variable selling and administrative expenses 0 0 0 0 Contribution margin Fixed expenses: Fixed manufacturing overhead Fixed selling and administrative expenses Total fixed expenses Net operating income (loss) 0 $ 0 0 $ Complete this question by entering your answers in the tabs below. Required 1 Required 2 Requird 3 Reconcile the variable costing and absorption costing net operating Incomes. (Enter any losses or deductions as a negative value.) Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes August Variable costing net operating income (loss) Add (deduct) fixed manufacturing overhead cost deferred in (released from) inventory under absorption costing Absorption costing net operating income (loss) July
chapter 6 4
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started