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Mahugh Company, which has only one product, has provided the following data concerning its most recent month of operations. Selling price $ 1 2 2
Mahugh Company, which has only one product, has provided the following data concerning its most recent month of operations. Selling price $ Units in beginning inventory Units produced Units sold Units in ending inventory Variable costs per unit: Direct materials $ Direct labour $ Variable manufacturing overhead $ Variable selling and administrative $ Fixed costs: Fixed manufacturing overhead $ Fixed selling and administrative $ Required: a Compute the cost of a single product unit under both the absorption costing and variable costing approaches. b Prepare an income statement for the month using the variable costing method. c Prepare an income statement for the month using the absorption costing method. d Reconcile the absorption costing and variable costing operating income in b and c BONUS marks a Variable Costing Direct Materials Direct Labour Variable Manufacturing OH Unit Product Cost Absorption Costing Direct Materials Direct Labour Variable Manufacturing OH Fixed Manufacturing OH Unit Product Cost b Variable costing income Sales Less variable expenses: Variable cost of goods sold Beginning inventory Add variable manufacturing costs Goods available for sale Less ending inventory Variable costs of goods sold Variable selling and admin Contribution margin Less xed expense: Fixed manufacturing overhead Fixed selling and administrative Operating income c Absorption costing income statement Sales Cost of goods sold: Beginning inventory Add cost of good manufactured Goods available for sale Less ending inventory Gross Margin Less Selling and Admin Expenses Variable selling and admin Fixed selling and admin Operating income d Operating income under variable costing Add xed manufacturing overhead cost deferred in inventory under absorption costing $ Operating income under absorption costingMahugh Company, which has only one product, has provided the following data concerning its most recent month of operations. tableSelling price,$
Mahugh Company, which has only one product, has provided the following data
concerning its most recent month of operations.
Selling price $
Units in beginning inventory
Units produced
Units sold
Units in ending inventory
Variable costs per unit:
Direct materials $
Direct labour $
Variable manufacturing overhead $
Variable selling and administrative $
Fixed costs:
Fixed manufacturing overhead $
Fixed selling and administrative $
Required:
a Compute the cost of a single product unit under both the absorption costing and variable costing approaches.
b Prepare an income statement for the month using the variable costing method.
c Prepare an income statement for the month using the absorption costing method.
d Reconcile the absorption costing and variable costing operating income in b and c BONUS marks
a
Variable Costing
Direct Materials
Direct Labour
Variable Manufacturing OH
Unit Product Cost
Absorption Costing
Direct Materials
Direct Labour
Variable Manufacturing OH
Fixed Manufacturing OH
Unit Product Cost
b
Variable costing income
Sales
Less variable expenses:
Variable cost of goods sold
Beginning inventory
Add variable manufacturing costs
Goods available for sale
Less ending inventory
Variable costs of goods sold
Variable selling and admin
Contribution margin
Less xed expense:
Fixed manufacturing overhead
Fixed selling and administrative
Operating income
c
Absorption costing income statement
Sales
Cost of goods sold:
Beginning inventory
Add cost of good manufactured
Goods available for sale
Less ending inventory
Gross Margin
Less Selling and Admin Expenses
Variable selling and admin
Fixed selling and admin
Operating income
d
Operating income under variable costing
Add xed manufacturing overhead cost deferred in inventory under absorption costing $
Operating income under absorption costingMahugh Company, which has only one product, has provided the following data concerning its most recent month of operations.
tableSelling price,$
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