L12 fx D E F G H T J K L M N O P Q R 5 T A B C 1 Chapter 6: Applying Excel 2 9 Data 4 Selling price per unit $60 5 Manufacturing costs 6 Variable per un mod 7 Drech materials $11 Drect labor S8 Variable manufacturing avarhead 53 10 Fxed manufacturing whead per har $120,000 11 Selling and administrative experibes 12 Variable per un cold S4 13 Fxed per year $70,CO3 14 15 Y1 Ya 2 16 Units beginning inventory 17 Units produced during the ycar 10,000 6,000 18 units sold during the year B.CO 8,000 19 20 Ender a fomundo each of the cells marked mina? bolom 21 Review Problem 1: Contrasting Variable and Absorption Costing 22 23 Campule the Ending Inventory 24 Year 1 Year 2 25 units n beginning inventory 3 2 26 units amduced durng the year 7 7 27 units sold cuting the year ? ? 28 Units ending inventory ? 29 Compute the Absorption Cosaing unit Product Cost 31 Year 1 YAA 32 Direct materials ? ? 33 Chact labor ? 2 34 Variable manufacturing overhead 7 ? 35 Find manufacturing cathed ? ? Abeurption costing unik product wol ? ? 37 38 Construct the Absorption Costing Income Statement 39 Year 1 Year 2 40 Sales 7 7 41 Coal of goods sold 7 2 42 Gruus mergin ? ? 43 Selling and administrative expenses ? ? 44 Net operating Income 7 45 46 Compute the Variable Gosting Unit Product Cost 47 Yeert Year 2 48 Ciech material ? 49 Direct labor ? So Vanable manufacturing overead ? 2 Chapter 6 Form + Edit + 100% L12 C D E F G H K L M N P Q R S T > 22 23 Compute the Ending Inventory 24 Yeart Year 2 25 Units beginning inventory 3 26 Units produced durg the year ? ? 27 Units sold curtna the year ? 2 28 units nanding inventory 7 2 29 30 Compute the Absorption Costing Unit Product Cost 31 Yeart Year 2 32 Chract materiala 7 2 33 Cirect labor ? ? Variable manufacturing overhead ? 7 35 Fixed manufacturing overhead ? 2 36 Absorption costing unk aroduct at 7 2 37 32 Construct the Absorption Costing Income Statement 39 VA1 YAA? 40 Salus ? ? 41 Cost of goods cold ? ? 42 Gross mergin 7 43 Selling and administrative AXPARA 7 ? 44 Net operating income ? 45 46 Compute the Variable Costing Unit Product Cast 47 Year 1 Year 2 48 Chat materials 7 7 49 Chacabar 7 2 50 Variable manufacturing overnad ? ? 51 Vanable costing unit productos ? 2 52 53 Construct the Variable Costing Income Statement 54 Year 1 55 Sales 7 56 Variable penge 57 Variable cost of goods sold ? 58 Variable selling and administrative expenses ? 2 59 Contrbullon margin 7 60 Fised expense 61 Fuod manufacturing overhead ? G2 Fxed selling and administrative expenses ? ? 63 Not aparating home 7 64 65 66 67 G& 69 70 74 Chapter 6 Form + Year 2 2 ? ? ? ? Edit 100% 2. Change all of the numbers in the data area of your worksheet so that it looks like this: A B 1 Chapter 6: Applying Excel 2 3 4. $ 319 5 6 $ 120 7 Data Selling price per unit Manufacturing costs: Variable per unit produced: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead per year Selling and administrative expenses: Variable per unit sold Fixed per year 50 8 $ $ 23 9 $ 140,000 10 11 $ 5 12 $ 56,000 13 14 Year 1 Year 2 15 Units in beginning inventory Units produced during the year 17 Units sold during the year 18 0 2,800 2,600 2,500 2,600 If your formulas are correct, you should get the correct answers to the following questions. (a) What is the net operating income (loss) in Year 1 under absorption costing? (b) What is the net operating income (loss) in Year 2 under absorption costing? (c) What is the net operating income (loss) in Year 1 under variable costing? (d) What is the net operating income (loss) in Year 2 under variable costing? (e) The net operating income (loss) under absorption costing is less than the net operating income (oss) under variable costing in Year 2 because: (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) ? Units were left over from the previous year. ? The cost of goods sold is always less under variable costing than under absorption costing. 2 Sales exceeded production so some of the fixed manufacturing overhead of the period was released from inventories under absorption costing. 3. Make a note of the absorption costing net operating income (loss) in Year 2. At the end of Year 1, the company's board of directors set a target for Year 2 of net operating income of $180,000 under absorption costing. If this target is met, a hefty bonus would be paid to the CEO of the company. Keeping everything else the same from part (2) above, change the units produced in Year 2 to 5,000 units. (a) Would this change result in a bonus being paid to the CEO? O Yes (b) What is the net operating income (loss) in Year 2 under absorption costing? (c) Would this doubling of production in Year 2 be in the best interests of the company if sales are expected to continue to be 2,600 units per year? O Yes O No