JYD Corporation uses an absorption costing system for internal reporting purposes. At present, however, it is considering to use the variable costing system.

Following are some data regarding JYD Corporation’s budgeted and actual operations for the calendar year 2018.

       

Costs                                                             Budgeted                            Actual

Materials                                                     P25,200                P23,400

Labor                                                             18,480                                 17,160

Variable Factory Overhead                      8,400                                    7,800

Fixed Factory Overhead                        10,640                                 10,000

Variable Selling Expenses                     16,800                                 15,000

Fixed Selling Expenses                           14,700                                 14,700

Variable Administrative Expenses        4,200                                     3,750

Fixed Administrative Expenses              6,300                                     6,375

Total                                                              P104,720                              P98,185

                                                                        Budgeted                            Actual

                                                                           (Units)                               (Units)

Finished goods inventory beginning                     280                                    280

Production                                                     1,120                                  1,040

Sales                                                                 1,120                                  1,000

The budgeted costs were computed based on the budgeted production and sales of 1,120 units, the company’s normal capacity level. The Corporation uses a predetermined factory overhead rate for applying manufacturing overhead costs to its product. The denominator level used in developing the predetermined rate is the firm’s normal capacity. Any over or under applied factory overhead cost is closed to cost of goods sold at the end of the year.

There is no work in process inventories at either the beginning or end of the year. The actual selling price was the same as the amount planned, P130 per unit.

The previous year’s planned per unit manufacturing costs were the same as the current planned unit manufacturing cost. The beginning inventory of finished goods for absorption costing purposes was valued at such per- unit manufacturing cost.

Question:

1. What is the standard product costs per unit under Absorption Costing and Variable Costing?
2. What are the manufacturing cost variances for Variable Manufacturing Cost and Fixed Manufacturing cost?
3. What is the Corporation’s operating income (loss) under both the absorption and variable costing methods?
4. What were the values of the company’s actual ending finished goods inventory under the absorption and variable costing methods?
5. What were the Corporation’s total fixed costs expensed this year on both absorption and variable costing methods?
6. What was the Corporation’s actual manufacturing contribution margin for the year calculated on the variable costing basis?
7. What was the Corporation’s actual contribution margin for the year calculated on the variable costing method?
8. What were the total variable costs expensed currently by the corporation under the absorption and variable costing bases?
9. The difference between the Corporations’ operating income calculated on the absorption costing basis and that on the variable costing basis was how much?