Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

complete all requirements Data table Data table Requirements 1. What denominator level is Sweetdelight using to allocate fixed manufacturing costs to the candy? How is

complete all requirements
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
Data table Data table Requirements 1. What denominator level is Sweetdelight using to allocate fixed manufacturing costs to the candy? How is Sweetdelight treating any favorable or unfavorable production-volume variance at the end of the year? Explain your answer briefly. 2. How did Sweetdelight's accountants arrive at the breakeven volume of 19,000 units? 3. Prepare a variable costing-based income statement for each year. Explain the variation in the variable costing operating income for each year based on contribution margin per unit and sales volume. 4. Reconcile the operating incomes under variable costing and absorption costing for each year, and use this information to explain to Luke Macon the positive operating income in 2020 and the drop in operating income in 2021. Sweeldelght uses standard costing to produce a particulatly popolar typo of candy. Sweotdelights President Like Macon was unhappy affer reviowing the income statements for the first 3 years of business. Ho said, 7 was told by cur accountants-and in fact, I have memorized-that our breakeven volume is 19,000 units. I was happy that we reached that sales goal in each of our first 2 years. Bot here' the strange thing in out frest year, we sold 19,000 units and indeed we broke even. Then, in our spoond year we sold the same volumo and had a thenficant, positive oforating We didnt change our selling price or cost struchire over the past 3 years ans have no price, eficiency, of spending variances.... so whisis going on?l: Requirement 1. What denominator lovel in Sweetdelight using to allocale fixed manufacturing costs to the candy? How is Sweetdelight treating any favorable or unfavorabie orotuction volure variance at the end of the yoar? Explain your antwer briefy. The denomicator level uped to alocate fxed mandactiring coets is unts. We can see from weetdelghr's incorme statements that h disposes of any piroduction-volume variance againat in 2020,22.800 units were produced insadad of the budgated 10,000 units. This pesuted in a production volume varances which, when wrateo of gross margin. Data table Data table Requirements 1. What denominator level is Sweetdelight using to allocate fixed manufacturing costs to the candy? How is Sweetdelight treating any favorable or unfavorable production-volume variance at the end of the year? Explain your answer briefly. 2. How did Sweetdelight's accountants arrive at the breakeven volume of 19,000 units? 3. Prepare a variable costing-based income statement for each year. Explain the variation in the variable costing operating income for each year based on contribution margin per unit and sales volume. 4. Reconcile the operating incomes under variable costing and absorption costing for each year, and use this information to explain to Luke Macon the positive operating income in 2020 and the drop in operating income in 2021. Sweeldelght uses standard costing to produce a particulatly popolar typo of candy. Sweotdelights President Like Macon was unhappy affer reviowing the income statements for the first 3 years of business. Ho said, 7 was told by cur accountants-and in fact, I have memorized-that our breakeven volume is 19,000 units. I was happy that we reached that sales goal in each of our first 2 years. Bot here' the strange thing in out frest year, we sold 19,000 units and indeed we broke even. Then, in our spoond year we sold the same volumo and had a thenficant, positive oforating We didnt change our selling price or cost struchire over the past 3 years ans have no price, eficiency, of spending variances.... so whisis going on?l: Requirement 1. What denominator lovel in Sweetdelight using to allocale fixed manufacturing costs to the candy? How is Sweetdelight treating any favorable or unfavorabie orotuction volure variance at the end of the yoar? Explain your antwer briefy. The denomicator level uped to alocate fxed mandactiring coets is unts. We can see from weetdelghr's incorme statements that h disposes of any piroduction-volume variance againat in 2020,22.800 units were produced insadad of the budgated 10,000 units. This pesuted in a production volume varances which, when wrateo of gross margin

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

Students also viewed these Accounting questions