Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Dance Creations manufactures authentic Hawaiian hula skirts that are purchased for traditional Hawaiian celebrations, costume parties, and other functions. During its first year of business,

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
Dance Creations manufactures authentic Hawaiian hula skirts that are purchased for traditional Hawaiian celebrations, costume parties, and other functions. During its first year of business, the company incurred the following costs: variable cost per Hula skirt Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative expenses Fixed cost per month Fixed manufacturing overhead Fixed selling and administrative expenses $ 9.60 3.40 1.05 0.40 $16,125 4,950 Dance Creations charges $30 for each skirt that it sells. During the first month of operation, it made 1,500 skirts and sold 1,375. Required: 1. Assuming Dance Creations uses variable costing, calculate the variable manufacturing cost per unit for last month. 2. Complete a variable costing income statement for the last month. 3. Assuming Dance Creations uses full absorption costing, calculate the full manufacturing cost per unit for the last month. 4. Complete a full absorption costing income statement. 6. Suppose next month Dance Creations expects to produce 1.500 hula skirts and sell 1,600. Without recreating the new income statements, calculate the difference in profit between variable costing and full absorption costing. Which would be higher? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 6 Assuming Dance Creations uses variable costing, calculate the variable manufacturing cost per unit for last month. (Round your answer to 2 decimal places.) Total Variable Manufacturing Cost/Unit Required Required 2 > Required 1 Required 2 Required 3 Required 4 Required 6 Complete a variable costing income statement for last month. (Round your answers to 2 decimal places.) Dance Creations Contribution Margin Income Statement For the Last Month Contribution Margin Net Operating Income Required 1 Required 2 Required 3 Required 4 Required 6 Assuming Dance Creations uses full absorption costing, calculate the full manufacturing cost per unit for last month. (Round your answer to 2 decimal places.) Total Absorption Cost/Unit Required 1 Required 2 Required 3 Required 4 Required 6 Complete a full absorption costing income statement. (Round your intermediate calculations and the final answers to 2 decimal places.) Dance Creations Full Absorption Income Statement For Last Month Gross Margin Net Operating Income Required 1 Required 2 Required 3 Required 4 Required 6 Suppose next month Dance Creations expects to produce 1,500 hula skirts and sell 1,600. Without recreating the new income statements, calculate the difference in profit between variable costing and full absorption costing. Which would be higher? Difference in profit Which would be higher

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered 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