Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please help on all parts and can you show me how you did it? im so lost!! plz help is this better?? please still answer

please help on all parts and can you show me how you did it? im so lost!! plz help image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
is this better?? please still answer image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
now???
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
Absorption Statement Absorption costine does not distinguish between variable and fixed costs. All manufacturing costs are included in the cost of goods sold. Saxon, Inc. Absorption Costing Income Statement For the Year Ended December 31 Sales $1.175,000 Cost of goods sold Cost of goods manufactured $500,000 Ending inventory (200,000) Total cost of goods sola (600,000) Gross profit 3525,000 Selling and administrative expenses (290,000) Operating income $235,000 Variable Statement Under variable costing, the cost of goods manufactured includes only variable manufacturing costs. This type of income statement includes a computation of manufacturing margin. Saxon, Inc. Variable Costing Income Statement For the Year Ended December 31 Sales $1,125,00 $560,000 Variable cost of goods sold: Variable cost of goods manufactured Ending inventory Total variable cost of goods sold (340,000) (420,000) M 1420.000 Total variable cost of goods so Manufacturing narin 5795.000 1225.000 5400.000 Contribution Faxed costs Fixed manufacturing costs $240.000 COS,000) SI13.000 Operating Method Comparin Neview the core statements on mu hormoon Senteret med Variety Stawact, when compare the towy , te como el pese per essere bow or uns in die ding nentorys 5.000. There was no being love Amount Item Number of units Variable sales and most per Number of its montatured Variable cost of goods and perit Food manufacturing cost per un Manufacturing Decisions When we maturet er to the units Tehed goods or setected in and operating concrees and decremes competed is certains incocesach decision making station became into whether to orbe cepting would be more Al costs are come in the long run by someone is a business. Foragement commartesoro Manufacturing Decisions Whenever the units manufactured differ from the units sold, finished goods in wintory is affected. In anyang operating income, such increases and des could be musinterpreted asperating efficiencies melic Ench decision making situation should be carefully analyzed in deciding whether absorption or variable costing reporting We more sul All costs are controllable in the long run by someone within a buiness for at give level of management costs may be controller cocontrollable cost The production manager for faxon, Inc. is worried because the company is not showing high enough pront. Looking at the income statements on the Absorption Statement and the Vorteile State notices that the operating income is bigher on the absorption cost income statement. He is considering manufacturing another 10,000 units, up to the company's capacity for mandating in the coming yes He reason that this will boost operating income and satisfy the company's owner that the company is sufficiently profitabile. Although the total units manufactured changes, assume the total fixed count variable conta, unit sales price, and the sales devels are the same. Complete questions (C4) that follow. If the answer is zero, antero 1. Use the income statements on the Absorption Statement and variable Statement to complete the following table for the original production level. Then prepare similar income statements at a production level 10,000 units higher and add the information to the table. Assume that total fixed costs, unit variable costs, unit sales price, and the sales teves me the same at both production levels Operating Income Original Production Original Production Additional 10,000 Additional 10,000 Level-Absorption Level-Variable Units-Absorption Units-Variable 2. What is the change in operating income from producing 10,000 additional units under absorption costing? 3. What is the change in orating income from producing 10,000 additional units under wariable conting? 4. What would be your recommendation to the production manager? Do not produce the exten 10,000 units. The increase in operating income under absorption costing is due to fixed manufacturing costs being held in inventory, and the additional Inventory wil lead to higher handling, storage, financing, and obsolescence costs to Produce the extra 10,000 units Operating income will be increased, and the production manager will receive pase for creating higher profits c. Da no produce the extra 10,000 units Operating income does not change under absorption costing when the additional units are produced All care controle in the long run by someone with him for en love of gerent, co may be contable content Two mongerer son is worried because the company thowing a hugh protokootame the best statemente with the opening come to the cost comment en magnet 10,000 in to the competitor manufacture in the coming ons that this boot operating income and at the company in the central to the collected as the orta continand the sales vele are the same completion (1) the allow. If there, 1. Use the comments on the Awatement and are two colete the following to the gention et Thome wroductive 10,000 and add that Wormation to the Assume that can country, and the level or the both action devel Operating Income Original Production Original Production Additional 10,000 Atitional 10,000 Level-Absorption LevelVariable Units Aption Unit Variable 2. What a mechanows to come from booking 10,00n additional units under brancolino 3. What is the change in operating mom od 10,000 addona unit under variable conting? 4. Wat would be your recommandations to the production manager Da net produce 10,000 unit. The pana ini.com under storicing is due to the manufacturing cute berg hindi kventory, and monitory will lead to her handing, storage financing, and obsolescence cost D. Produce the extra 10.000 units. Operating income will be increased the production manager will come praise for creating higher protits. Doduce the 10.000 Operating con does not change under absorption cost when the statunits are produced Product the extra 10.000 untsi 2000 wwwxtra non hand and the actory pag at capacity, the units are not so Mastery Probleme Variable Corting for Management Analyse Abortion vs. Variable Corting rooms were no one has reported by como Deendag en tiem, un tie die Schwedted with the Rocco Alnetin Casting One watu wanadem Cost of mature indades You Can used in reports for external Variable Costa Pied tour overado o pato com os Beth and we actory contended out of any Yilding Absorption Statement A couting doms oot dispose and dist. Mauris conducerea de Saxon, Inc. Absorption Costing Income Statement For the Year Ended December 31 31.125.000 Cast of oost contactured $800,000 India in very 200.000 Total Codes (600.000 Grasso $525.000 Absorption Statement Absorption costing does not distinguish between variable and fixed costs. All manufacturing costs are induded in the cost of goods sold. Saxon, Inc. Absorption Costing Income Statement For the Year Ended December 31 Sales $1,125,000 Cost of goods sold Cost of goods manufactured $800,000 Ending inventory (200,000) Total cost of oods sold (600,000) Gross pront $525,000 Selling and administrative expenses (290,000) Operating income 5235,000 Variable Statement Leder variable costing, the cost of goods manufactured includes only variable manufacturing costs. This type of income statement indudes a computation of manufacturing margin Saxon, Inc. Variable Costing Income Statement For the Year Ended December 31 Sales $1,125,000 Variable cost of goods sold: Variable cost of goods manufactured Ending Inventory Total variable cost of goods sold $560,000 (140,000) Manufacturing margin Variable selling and administrative expenses (420,000) $705,000 (225.000 under the manufactured in any waren typen statement is coming Saco Inc Variable Coating Income Statement For the Year Ended December 31 Sie 11.125.000 cost of a Vamate manufactured Twing #14 11l 140.000 varice or goods solo 1420,000) acturing con 5705,000 Vracted 13,000 Contatti 3400.000 Functuring cost seling and trave expenses 240.000 15,000 (305,000 Orating income 3175.000 Method Comparison Rew the income statement on the Arabile Statement the complete the following. The company's sales price per 57 the rumber of res mening overtory 5000. The song way Item Amount Nocerurs Var les dades recoterunt Nuntereinita mured Method Comparison Review the come statements on the botteet and Statement, the completa a polowrote TIC ses 57, the morning 5.000. There was no be Item Ant Number of arit Variablesses and adminstrate cost perunt Number of tuned Variable of manche Freedmaturing cost perint Manufacturing Decisione Where to the dangers and cheese Indentat de secrete www All content the long run confort, che contacter The woman Santhrottles on the statement and the element, stw the pating income is on the root come wengi 16,000 to the commandatum in recommeat Here that this wonde comecome the church, that we coul, un Vrati centrales Complete, 1. comment content ble et commerce et common 10.000 units headition to seed contrible costs, Phone Operating Income Original Production Original Production Additional 10,000 Additional 10.000 Level-Absorption Level Variable Units-Absorption Units Variable Whave the units mancare le from the the goods weted Income, such increases and decreases could be more con decesur inefficiencies. Each deciso maior stue cardin deden wahreption rate comporting would be more All cents are controlable in me long run by someone was for a given level mar, costs may be combler The production manager for anon, bacard Deco Shop test the..come statements contam ve State notice that the operating home in the absorption cost come statemente considering manager 10.000 units to the compact Something e con that the operating comedy the contre tre company is ab Attitude that had, variable costs, unt sales price, no me estos are the same Complete questions (1)-(4) that for mere 1. Use the income semente contre este and blestate.coor to complete meg for the online. The control 10,000 units higher and add that formation to the table. Esame that countless, we pride and the sole disse thee et bordadienses Operating Income Original Production Original Production Additional 10,000 Additional 10,000 Level-Absorption Level-Variable Units-Absorption units-Variable | 2. What is the change in operating come from producing 10.000 annis der abortion costi? 3. What the change in conti come from producing 10.000 units under vatten? 4. Wat wald be your recommendation to the production manager? Do not produce the 10,000 units. The house operating cenderung in our time as being held in vottory and the contentory will to higher handing, og fancing and colescence D. Produce the extra 10.000. Operating in eine and the producto age without De produce the extra 10.000 - Operating income to a costing in the addition to Produce the extra 10,000 units. It was a good to have extent on hand and the factory Cesting capacity event at the eno od Absorption Statement Absorption costing does not distinguish between variable and fixed costs. All manufacturing costs are included in the cost of goods sold Saxon, Inc. 1 Absorption Costing Income Statement For the Year Ended December 31 Sales $1,125,000 Cost of goods sold: Cost of goods manufactured $800,000 Ending inventory (200,000) Total cost of goods sold (600,000) Gross profit $525,000 Selling and administrative expenses (290,000) Operating income $235,000 > Variable Statement Under variable costing, the cost of goods manufactured includes only variable manufacturing costs. This type of income statement includes a computation of manufacturing margin Saxon, Inc. Variable Costing Income Statement For the Year Ended December 31 Sales $1,125,000 Variable cost of goods sold: Variable cost of goods manufactured $560,000 Ending inventory (140,000) Total variable cost of goods sold (420,000) Saxon, Inc. Variable Costing Income Statement For the Year Ended December 31 I Sales $1,125,000 Variable cost of goods sold: Variable cost of goods manufactured $560,000 Ending inventory (140,000) Total variable cost of goods sold (420,000) Manufacturing margin $705,000 Variable selling and administrative expenses (225,000) Contribution margin $480,000 Fixed costs: Fixed manufacturing costs $240,000 Fixed selling and administrative expenses 65,000 Total fixed costs (305,000) Operating Income $175,000 Method Comparison Review the income statements on the Absorption Statement and Variable Statement, then complete the following table. The company's sales price per unit is $75, and the number of units in ending Inventory is 5,000. There was no beginning inventory, Item Amount Number of units sold Variable sales and administrative cost per unit Number of units manufactured Method Comparison Review the income statements on the Absorption Statement and Variable Statement, then complete the following table. The company's sales price per unit is $75, and the number of units in ending inventory is 5,000. There was no beginning inventory I Item Amount Number of units sold Variable sales and administrative cost per unit Number of units manufactured Variable cost of goods manufactured per unit Fixed manufacturing cost per unit Manufacturing Decisions Whenever the units manufactured differ from the units sold, finished goods inventory is affected. In analyzing operating income, such Increases and decreases could be misinterpreted as operating efficiencies or inefficiencies. Each decision-making situation should be carefully "analyzed in deciding whether absorption or variable costing reporting would be more useful All costs are controllable in the long run by someone within a business. For a given level of management, costs may be controllable costs or noncontrollable costs. The production manager for Saxon, Inc. is worried because the company is not showing a high enough profit. Looking at the income statements on the Absorption Statement and the Variable Statement, he notices that the operating income is higher on the absorption cost income statement. He is considering manufacturing another 10,000 units, up to the company's capacity for manufacturing. In the coming year. He reasons that this will boost operating income and satisfy the company's owner that the company is sufficiently profitable. Although the total units manufactured changes, assume that total fixed costs, unit variable costs, unit sales price, and the sales levels are the same. Complete questions (1) (4) that follow. If the answer is zero, enter 0. 1. Use the income statements on the Absorption Statement and Variable Statement to complete the following table for the original production level. Then prepare similar income statements at a production level 10,000 units higher and add that information to the table. Assume that total fixed costs, unit variable costs, unit sales price, and the sales levels are the same at both production levels total units manufactured changes, assume that total fixed costs, unit variable costs, unit sales price, and the sales levels are the same. Complete questions (1)-(4) that follow. If the answer is zero, enter "0" 1. Use the Income statements on the Absorption Statement and Variable Statement to complete the following table for the original production level. Then prepare similar income statements at a production level 10,000 units higher and add that information to the table. Assume that total fixed costs, unit variable costs, unit sales price, and the sales levels are the same at both production levels. Operating Income Original Production Original Production Additional 10,000 Additional 10,000 Level-Absorption Level-Variable Units-Absorption Units-Variable 2. What is the change in operating income from producing 10,000 additional units under absorption costing? 3. What is the change in operating Income from producing 10,000 additional units under variable costing? 4. What would be your recommendation to the production manager? a. Do not produce the extra 10,000 units. The increase in operating income under absorption costing is due to fixed manufacturing costs being held in Inventory, and the additional Inventory will lead to higher handling, storage, financing, and obsolescence costs. b. Produce the extra 10,000 units. Operating Income will be increased, and the production manager will receive praise for creating higher profits c. Do not produce the extra 10,000 units. Operating income does not change under absorption costing when the additional units are produced. d. Produce the extra 10,000 units. It's always a good idea to have extra units on hand and keep the factory operating at capacity, even if all the units are not sold

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

Auditing Basics

Authors: 3G E-Learning

1st Edition

1984624261, 978-1984624260

More Books

Students also viewed these Accounting questions

Question

11. Explain what dreams are, why we have them, and what they mean.

Answered: 1 week ago

Question

Ensure continued excellence in people management.

Answered: 1 week ago

Question

Enhance the international team by recruiting the best people.

Answered: 1 week ago