Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Question 1 (25 marks) ERGELA Company manufactures and sells a single product. The following costs were incurred during the company's first year of operations: Mandag
Question 1 (25 marks) ERGELA Company manufactures and sells a single product. The following costs were incurred during the company's first year of operations: Mandag Direct Ureditator Varie manufacturing over end Variable selling and administre Foad cost per year Pusdung veel 250.00 Fixed Wing ed adentrati per 132.00 During the year, the company produced 20,000 units and sold 19,000 units. The selling price of the company's product is $75 per unit. Required: 1. Assume that the company uses absorption costing, a. Compute the unit product cost. (5 marks) Prepare an income statement for the year (8 marks) Absorption Costing Income Statement Sales Cost of goods sold Beginning inventory Add Cost of goods manufactured Goods avalatie for sale Less Ending inventory Gross margin Selling and administrative expenses Operating income 2. Assume that the company uses variable costing. 2. Assume that the company uses variable costing. Compute the unit product cost. (2 marks) b. Prepare an income statement for the year. (10 marks) Variable Costing Income Statement Sales Variable expenses: Variable cost of goods sold: Beginning inventory Add: Variable manufacturing costs Goods available for sale Less: Ending inventory Variable cost of goods sold Variable selling expense Contribution margin Fixed expenses: Fixed manufacturing overhead Fixed selling and administrative Operating income Question 1 (25 marks) ERGELA Company manufactures and sells a single product. The following costs were incurred during the company's first year of operations: Mandag Decas Dractie Vising and Find ang hot Pred seting and son During the year, the company produced 20,000 units and sold 19,000 units. The selling price of the company's product is $75 per unit. Required: 1. Assume that the company uses absorption costing. a. Compute the unit product cost. (5 marks) Prepare an income statement for the year (8 marks) Absorption Costing Income Statement Sales ( Coll doodsto Beginning inventory Add Cost of goods manufactured Goods available for sale Loss Ending inventory Gross margin Selling and administrative expenses Operating income 2. Assume that the company uses variable costing. 2. Assume that the company uses variable costing. .. Compute the unit product cost. (2 marks) b. Prepare an income statement for the year. (10 marks) Variable Costing Income Statement Sales Variable expenses: Variable cost of goods sold: Beginning inventory Add: Variable manufacturing costs Goods available for sale Less: Ending inventory Variable cost of goods sold Variable selling expense Contribution margin Fixed expenses: Fixed manufacturing overhead Fixed selling and administrative Operating income Question 1 (25 marks) ERGELA Company manufactures and sells a single product. The following costs were incurred during the company's first year of operations: Mandag Direct Ureditator Varie manufacturing over end Variable selling and administre Foad cost per year Pusdung veel 250.00 Fixed Wing ed adentrati per 132.00 During the year, the company produced 20,000 units and sold 19,000 units. The selling price of the company's product is $75 per unit. Required: 1. Assume that the company uses absorption costing, a. Compute the unit product cost. (5 marks) Prepare an income statement for the year (8 marks) Absorption Costing Income Statement Sales Cost of goods sold Beginning inventory Add Cost of goods manufactured Goods avalatie for sale Less Ending inventory Gross margin Selling and administrative expenses Operating income 2. Assume that the company uses variable costing. 2. Assume that the company uses variable costing. Compute the unit product cost. (2 marks) b. Prepare an income statement for the year. (10 marks) Variable Costing Income Statement Sales Variable expenses: Variable cost of goods sold: Beginning inventory Add: Variable manufacturing costs Goods available for sale Less: Ending inventory Variable cost of goods sold Variable selling expense Contribution margin Fixed expenses: Fixed manufacturing overhead Fixed selling and administrative Operating income Question 1 (25 marks) ERGELA Company manufactures and sells a single product. The following costs were incurred during the company's first year of operations: Mandag Decas Dractie Vising and Find ang hot Pred seting and son During the year, the company produced 20,000 units and sold 19,000 units. The selling price of the company's product is $75 per unit. Required: 1. Assume that the company uses absorption costing. a. Compute the unit product cost. (5 marks) Prepare an income statement for the year (8 marks) Absorption Costing Income Statement Sales ( Coll doodsto Beginning inventory Add Cost of goods manufactured Goods available for sale Loss Ending inventory Gross margin Selling and administrative expenses Operating income 2. Assume that the company uses variable costing. 2. Assume that the company uses variable costing. .. Compute the unit product cost. (2 marks) b. Prepare an income statement for the year. (10 marks) Variable Costing Income Statement Sales Variable expenses: Variable cost of goods sold: Beginning inventory Add: Variable manufacturing costs Goods available for sale Less: Ending inventory Variable cost of goods sold Variable selling expense Contribution margin Fixed expenses: Fixed manufacturing overhead Fixed selling and administrative Operating income
Step 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