Answered step by step
Verified Expert Solution
Question
1 Approved Answer
During the first year of operations, 18,000 units were manufactured and 13,500 units were sold. On August 31, Olympic Inc. prepared the following income statement
During the first year of operations, 18,000 units were manufactured and 13,500 units were sold. On August 31, Olympic Inc. prepared the following income statement based on the variable costing concept:
Olympic Inc. Variable Costing Income Statement For Year Ended August 31, 20-- | ||
Sales | $297,000 | |
Variable cost of goods sold: | ||
Variable cost of goods manufactured | $288,000 | |
Less ending inventory | 72,000 | |
Variable cost of goods sold | 216,000 | |
Manufacturing margin | $ 81,000 | |
Variable selling and administrative expenses | 40,500 | |
Contribution margin | $ 40,500 | |
Fixed costs: | ||
Fixed manufacturing costs | $ 12,000 | |
Fixed selling and administrative expenses | 10,800 | 22,800 |
Income from operations | $ 17,700 | |
?
Determine the unit cost of goods manufactured, based on (a) the variable costing concept and (b) the absorption costing concept.
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