Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Please help. The tables I did are all incorrect. Thank you. Question 4 Not changed since last attempt Marked out of 2.50 P Flag question
Please help. The tables I did are all incorrect. Thank you.
Question 4 Not changed since last attempt Marked out of 2.50 P Flag question Absorption and Variable Costing Comparisons Red Arrow Blueberries manufactures blueberry jam. Because of bad weather, its blueberry crop was small. The following data have been gathered for the summer quarter of last year: Beginning inventory (cases) 0 Cases produced 8,000 Cases sold 7,000 Sales price per case $ 115 Direct materials per case $ 25 Direct labor per case $ 40 Variable manufacturing overhead per case $ 10 Total fixed manufacturing overhead $ 192,000 Variable selling and administrative cost per case $ 2 Fixed selling and administrative cost $ 38,000 Functional Income Statement Contribution Income Statement Ending Inventory Analysis (a) Prepare a functional income statement for the quarter using absorption costing. (Round answers to the nearest dollar. Do not use negative signs with your answers, EXCEPT if you calculate a net loss.) RED ARROW BLUEBERRIES Functional (Absorption Costing) Income Statement For the Summer Quarter (Last Year) Sales 522,000 Cost of goods sold: Variable costs $ 27,000 Fixed costs 300,000 Goods available 480,000 Ending inventory 16,000 464,000 Gross profit 58,000 Operating expenses: Variable selling and administrative $ 17,400 Fixed selling and administrative 48,000 65,400 Net income (loss) (7,400) (b) Prepare a contribution income statement for the quarter using variable costing. (Do not use negative signs with your answers, EXCEPT if you calculate a net loss.) RED ARROW BLUEBERRIES Contribution (Variable Costing) Income Statement For the Summer Quarter (Last Year) Sales 522,000 Variable expenses: Manufacturing 26,100 Selling and administrative 17,400 191,400 Contribution margin 330,600 Fixed expenses: Manufacturing overhead $ 300,000 Selling and administrative 48,000 348,000 Net income (loss) (17,400) $ (c) What is the value of ending inventory under absorption costing? (Round answer to the nearest whole number.) $ 16,000 (d) What is the value of ending inventory under variable costing? $ 330,600 (e) The difference in the value of ending inventory in parts (c) and (d) is explained by the following difference between absorption and variable costing: Variable costing assigns only variable manufacturing costs to products while absorption costing assigns both variable and fixed manufacturing costs to products. Variable costing treats all manufacturing costs as variable costs while absorption costing treats only variable manufacturing costs as variable costs. Absorption costing treats fixed costs as period costs while variable costing treats fixed costs as product costs. Absorption costing treats all manufacturing costs as period costs while variable costing treats only variable manufacturing costs as period costsStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started