Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Play Zone manufactures video games that it sells for $43 each. The company uses a fixed manufacturing overhead allocation rate of $6 per game. Assume

image text in transcribed

Play Zone manufactures video games that it sells for $43 each. The company uses a fixed manufacturing overhead allocation rate of $6 per game. Assume all costs and production levels are exactly as planned. The following data are from Play Zone's first two months in business during 2018: : (Click the icon to view the data.) Requirements Data Table October November Sales 1,600 units 3,000 units Production 2,900 units 2,900 units a. $ 17 $ 17 b. 3 3 1. Compute the product cost per game produced under absorption costing and under variable costing. 2. Prepare monthly income statements for October and November, including columns for each month and a total column, using these costing methods: absorption costing. variable costing. 3. Is operating income higher under absorption costing or variable costing in October? In November? Explain the pattern of differences in operating income based on absorption costing versus variable costing. 4. Determine the balance in Finished Goods Inventory on October 31 and November 30 under absorption costing and variable costing. Compare the differences in inventory balances and the differences in operating income. Explain the differences in inventory balances based on absorption costing versus variable costing. Variable manufacturing cost per game Sales commission cost per game Total fixed manufacturing overhead Total fixed selling and administrative costs 17,400 17,400 10,000 10,000 Print Done

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Global Financial Systems Stability And Risk

Authors: Jon Danielsson

1st Edition

0273774662, 9780273774662

More Books

Students also viewed these Accounting questions

Question

In your opinion, who should define normal versus abnormal behavior?

Answered: 1 week ago

Question

Has each action got a clear and measurable outcome?

Answered: 1 week ago

Question

Have you eliminated jargon and unexplained acronyms?

Answered: 1 week ago