*Problem 8.35A a-b The Daniel Tool & Die Corporation has been in de ce for a little over three years. The company's sales have been increasing each year as it builds a reputation. The company manufactures dies to its customers' specifications and therefore uses a job-order cost system. Factory Overhead is applied to the jobs based on direct labour hours--the absorption costing (full) mathed. Over-applied or under-applied overhead is treated as an adjustment to cost of goods sold. The company's income statements and other data for the past two years are as follows: DANIELS TOOL & DIE CORPORATION 2019-2020 Comparative Income Statements 2019 2020 5830,100 $1,015,600 Cost of goods sold Finished goods, January 1 24,800 17,500 Cost of good manufactured 541,500 668,460 Total 566,300 686,060 Finished goods, December 31 12,600 14,000 Cost of good sold before overhead adjustment 548,700 672,060 Under applied factory overhead 35,400 14,400 Cost of goods sold 584,100 68,50 Gross profit 245.000 246,000 329,140 Sellings 81,900 $4,500 Administrative 69,100 74,900 Total rating expenses 151,000 160,400 Operating in 395,000 05 S150,740 - Daniels Tool & Die Corporation Inventory Balances December 31, 2018 December 31, 2019 December 31, 2020 Raw material $21,700 $30,000 $10,500 Work in process $40,500 $47,200 $63,100 Direct labour hours used in WIP 1,370 1,640 2,280 Fished $24,800 $12,600 $14,000 Dired labour hours (used in FG) 1,440 1,050 850 Danied the same predetermined overhead rate in applying Overhead to its production orders in both 2019 and 2020. The rate was based on the following estimates: Fixed factory overhead 524,550 Variable factory rhead $152,210 Dired labour hours 24,550 Direct labour costs $147,300 In 2019 and 2020, the actual direct labour house wire 20.200 and 23,800, respectively. Raw materials put into production were 5291,800 in 2019 and $370,200 in 2020. The actual fixed head was $42,800 2019 and $38.200 for 2020, and the planned direct labour rate was the direct labour achieved. For both years, all of the administrative cost wie fixed. The variable portion of the selling expenses results from a commission that is paid as a percentage of the sales rev. For the year ended December 31, 2020, prepare a revised income statement for Daniels Tool & Die Corporation using the variable-citing method. Daniels Tools & Die Corporation Variable-Costing Income Statement V Reconcile the difference in praling income between Daniels Tool & Die Corporation 2020 aption- ci income statement and the revised 2020 income statement prepared under variable costing. Variable costing rating income FMOH deferred is work in pro Inventory FMOH released from ind good wintory Absorption costi oprating income *Problem 8.35A a-b The Daniel Tool & Die Corporation has been in de ce for a little over three years. The company's sales have been increasing each year as it builds a reputation. The company manufactures dies to its customers' specifications and therefore uses a job-order cost system. Factory Overhead is applied to the jobs based on direct labour hours--the absorption costing (full) mathed. Over-applied or under-applied overhead is treated as an adjustment to cost of goods sold. The company's income statements and other data for the past two years are as follows: DANIELS TOOL & DIE CORPORATION 2019-2020 Comparative Income Statements 2019 2020 5830,100 $1,015,600 Cost of goods sold Finished goods, January 1 24,800 17,500 Cost of good manufactured 541,500 668,460 Total 566,300 686,060 Finished goods, December 31 12,600 14,000 Cost of good sold before overhead adjustment 548,700 672,060 Under applied factory overhead 35,400 14,400 Cost of goods sold 584,100 68,50 Gross profit 245.000 246,000 329,140 Sellings 81,900 $4,500 Administrative 69,100 74,900 Total rating expenses 151,000 160,400 Operating in 395,000 05 S150,740 - Daniels Tool & Die Corporation Inventory Balances December 31, 2018 December 31, 2019 December 31, 2020 Raw material $21,700 $30,000 $10,500 Work in process $40,500 $47,200 $63,100 Direct labour hours used in WIP 1,370 1,640 2,280 Fished $24,800 $12,600 $14,000 Dired labour hours (used in FG) 1,440 1,050 850 Danied the same predetermined overhead rate in applying Overhead to its production orders in both 2019 and 2020. The rate was based on the following estimates: Fixed factory overhead 524,550 Variable factory rhead $152,210 Dired labour hours 24,550 Direct labour costs $147,300 In 2019 and 2020, the actual direct labour house wire 20.200 and 23,800, respectively. Raw materials put into production were 5291,800 in 2019 and $370,200 in 2020. The actual fixed head was $42,800 2019 and $38.200 for 2020, and the planned direct labour rate was the direct labour achieved. For both years, all of the administrative cost wie fixed. The variable portion of the selling expenses results from a commission that is paid as a percentage of the sales rev. For the year ended December 31, 2020, prepare a revised income statement for Daniels Tool & Die Corporation using the variable-citing method. Daniels Tools & Die Corporation Variable-Costing Income Statement V Reconcile the difference in praling income between Daniels Tool & Die Corporation 2020 aption- ci income statement and the revised 2020 income statement prepared under variable costing. Variable costing rating income FMOH deferred is work in pro Inventory FMOH released from ind good wintory Absorption costi oprating income