Corporation manufactures and sells 50-inch television sets and uses standard costing. Actual data relating to January, February, and March are as follows:
The variable manufacturing costs per unit of High - Tech Corporation are as follows: High - Tech Corporation manufactures and sells 50-inch television sets and uses standard costing. Actual data relating to January, February, and March 2020 are as follows: (Click the icon to view the actual data.) (Click the icon to view the variable manufacturing cost data.) The selling price per unit is $2,600. The budgeted level of production used to calculate the budgeted fixed manufacturing cost per unit is 1,400 units. There are no price, efficiency, or spending variances. Any production-volume variance is written off to cost of goods sold in the month in which it occurs. High - Tech prepared the following income statements under variable costing and absorption costing. (Click the icon to view the variable costing statement.) (Click the icon to view the absorption costing statement.) Read the requirements. 1. Prepare income statements for High - Tech in January, February, and March 2020 under throughput costing. 2. Contrast the results in requirement 1 with the operating income results under variable costing and absorption costing. 3. Give one motivation for High-Tech to adopt throughput costing. January February March Unit data: 0 150 150 1,400 1,375 1,420 1,250 1,375 1,500 Beginning inventory Production Sales Variable costs: Manufacturing cost per unit produced Operating (marketing) cost per unit sold Fixed costs: 750 $ 750 $ 750 525 $ 525 $ 525 $ 490,000 $ 490,000 $ 490,000 Manufacturing costs Operating (marketing) costs 110,000 $ 110,000 $ 110,000 January February March Direct material cost per unit $ 375 $ 375 $ 375 175 175 175 Direct manufacturing labor cost per unit Manufacturing overhead cost per unit 200 200 200 $ 750 $ 750 $ 750 Variable costing income statement January 2020 February 2020 March 2020 Revenues $ 3,250,000 $ 3,575,000 $ 3,900,000 Variable costs: 0 $ Beginning inventory Variable manufacturing costs 112,500 1,031,250 112,500 1,065,000 1,050,000 Cost of goods available for sale 1,050,000 (112,500) 1,143,750 (112,500) 1,177,500 (52,500) Less: Ending inventory Variable cost of goods sold Variable operating costs 937,500 656,250 1,031,250 721,875 1,125,000 787,500 Total variable costs 1,593,750 1,753,125 1,912,500 Contribution margin 1,656,250 1,821,875 1,987,500 Fixed costs: Fixed manufacturing costs 490,000 110,000 490,000 110,000 490,000 110,000 Fixed operating costs Total fixed costs 600,000 600,000 600,000 $ 1,056,250 $ 1,221,875 $ 1,387,500 Operating income - Absorption costing income statement January 2020 February 2020 March 2020 Revenues $ 3,250,000 $ 3,575,000 $ 3,900,000 $ 0 $ 165,000 $ 165,000 Cost of goods sold: Beginning inventory Variable manufacturing costs Allocated fixed manufacturing costs Cost of goods available for sale Less: Ending inventory 1,050,000 490,000 1,031,250 481,250 1,065,000 497,000 1,677,500 1,727,000 1,540,000 (165,000) (77,000) (165,000) 8,750 Adj. for production-volume variance (7,000) F U 1,375,000 1,521,250 1,643,000 1,875,000 2,053,750 2,257,000 Cost of goods sold Gross margin Operating costs: Variable operating costs 656,250 110,000 721,875 110,000 787,500 110,000 Fixed operating costs 766,250 831,875 Total operating costs 897,500 $ 1,108,750 $ 1,221,875 $ 1,359,500 Operating income
