Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Denton Company manufactures and sells a single product. Cost data for the product are given: Variable costs per unit: Direct materials Direct labor Variable manufacturing

Denton Company manufactures and sells a single product. Cost data for the product are given: Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Total variable cost per unit Fixed costs per month: Fixed manufacturing overhead Fixed selling and administrative Total fixed cost per month $ 6 9 4 2 $ 21 $ 126,000 166,000 $ 292,000 The product sells for $47 per unit. Production and sales data for July and August, the first two months of operations, follow: July August Units Produced 21,000 21,000 Units Sold 17,000 25,000 The company's Accounting Department has prepared the following absorption costing income statements for July and August: Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Requirade July August $ 799,000 $ 1,175,000 425,000 625,000 374,000 200,000 550,000 216,000 $ 174,000 $ 334,000 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 a. Absorption costing b. Variable costing Cost Prepare variable costing income statements for July and August. Denton Company Variable Costing Income Statement Sales Variable expenses: Variable cost of goods sold Variable selling and administrative expenses Total variable expenses Contribution margin Fixed expenses: Fixed manufacturing overhead Fixed selling and administrative expenses Total fixed expenses Net operating income (loss) July August 0 $ 0 0 0 0 0 EA 0 0 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 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 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 August

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

Cpa Financial Accounting Examination Preparation Guide

Authors: Azhar Ul Haque Sario

1st Edition

979-8223666547

More Books

Students also viewed these Accounting questions

Question

=+from: a) a MNEs perspective? and b) the HRM managers perspective?

Answered: 1 week ago