EectronPlua manufactures and sells a unique electronic part Operating results for the first three years of activify were as follows (absompion costing basts\} Sales dropped by 203 during year 2 due to the entry of several foreign competitos imo the market Electronplus had expected sales to remain constant at 40,000 unds for the year. production was set at 50,000 units in order to build a buffer against unexpected spurts in demand Ey the start of year 3 , management could see that spcits in demand were unlikely and that the inventory was excessive. To work of the excessive invertaries. ElectronPlus cut back production dueng year 3 , as shown below. Additional intormation about the company folbws 2. The company's plant is hiphly automated Variable manufactunng coses (diect materlats, direct labouc, and varuble manufacturing overhead, total only 54 per unit and fined manufacturing overhead costs totai 5673,000 per year. b Fored manulacturing ovethead costs are applied to tnits of product on the basis of eoch yea's planned production (That is, a new ford overhead rate is computed each year) c. Varable seling and administrative experses are $2 per unit sold. Faed seiling and administrative expentes fotal 568,600 per year d. The companty uses a FFO imventory fow assumpeion The manapement of ElectronPlus cant understand why profits tripled durang year 2 when sales drupped by 20%, and why a loss was incurred during year 3 when sales recovered to previois levels Required: 1. Piepare a contribution format income statement for each yeut usung varable costing The magagement of ElectronPlus cant understand why profits tripied dunng year 2 when sales dropped by 20x, and why a loss was incurred during year 3 when sales recovered to previous leveis Required: 1. Prepare a contribubon format income statement for cach year using variable costing 2. Refer to the absorption costing income statements above a. Compute the unit product cost in each yed under absorption costing (Show how much of this cost is variable and how much is fixed) (Round your onswer to 2 decimal places.) b. Reconcile the variable costing and absorption costing operating inconse figures for each year, (iosces and deductible omounts should be indiceted by a minus sign. De not lenve any empty speces: input a 0 wherever it is required. Round your intermediste celculetions to 2 decimels and round your final answer to the nearest whole dolibr) 3. This part of the question is not pait of your cannect assignment. 4. This pert of the questoon is not pant of you Connect asbigninent Q.6. This part of the question is not part of your Connect assignment 6.6. if lean production had been in use during year 2 and year. What woukd the company's pperating incame (or loss) have been in edch year under absorgtion costing? (Loss amounts should be indiceted by a minus dign.) EectronPlua manufactures and sells a unique electronic part Operating results for the first three years of activify were as follows (absompion costing basts\} Sales dropped by 203 during year 2 due to the entry of several foreign competitos imo the market Electronplus had expected sales to remain constant at 40,000 unds for the year. production was set at 50,000 units in order to build a buffer against unexpected spurts in demand Ey the start of year 3 , management could see that spcits in demand were unlikely and that the inventory was excessive. To work of the excessive invertaries. ElectronPlus cut back production dueng year 3 , as shown below. Additional intormation about the company folbws 2. The company's plant is hiphly automated Variable manufactunng coses (diect materlats, direct labouc, and varuble manufacturing overhead, total only 54 per unit and fined manufacturing overhead costs totai 5673,000 per year. b Fored manulacturing ovethead costs are applied to tnits of product on the basis of eoch yea's planned production (That is, a new ford overhead rate is computed each year) c. Varable seling and administrative experses are $2 per unit sold. Faed seiling and administrative expentes fotal 568,600 per year d. The companty uses a FFO imventory fow assumpeion The manapement of ElectronPlus cant understand why profits tripled durang year 2 when sales drupped by 20%, and why a loss was incurred during year 3 when sales recovered to previois levels Required: 1. Piepare a contribution format income statement for each yeut usung varable costing The magagement of ElectronPlus cant understand why profits tripied dunng year 2 when sales dropped by 20x, and why a loss was incurred during year 3 when sales recovered to previous leveis Required: 1. Prepare a contribubon format income statement for cach year using variable costing 2. Refer to the absorption costing income statements above a. Compute the unit product cost in each yed under absorption costing (Show how much of this cost is variable and how much is fixed) (Round your onswer to 2 decimal places.) b. Reconcile the variable costing and absorption costing operating inconse figures for each year, (iosces and deductible omounts should be indiceted by a minus sign. De not lenve any empty speces: input a 0 wherever it is required. Round your intermediste celculetions to 2 decimels and round your final answer to the nearest whole dolibr) 3. This part of the question is not pait of your cannect assignment. 4. This pert of the questoon is not pant of you Connect asbigninent Q.6. This part of the question is not part of your Connect assignment 6.6. if lean production had been in use during year 2 and year. What woukd the company's pperating incame (or loss) have been in edch year under absorgtion costing? (Loss amounts should be indiceted by a minus dign.)
