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Scott Manufacturing makes only one product with total unit manufacturing costs of $ 5 4 , of which $ 3 6 is variable. No units
Scott Manufacturing makes only one product with total unit manufacturing costs of $ of which $ is variable. No units were on hand at the beginning of Year During Year and Year the only product manufactured was sold for $ per unit, and the cost structure did not change. Scott uses the firstin firstout inventory method and has the following production and sales for Year and Year : Units Manufactured Units Sold Year Year a Prepare gross profit computations for Year and Year using absorption costing. Do not use negative signs with your answers. Absorption Costing Year Year Sales Answer Answer Cost of goods sold: Beginning inventory Answer Answer Production Answer Answer Goods available Answer Answer Less: Ending inventory Answer Answer Cost of goods sold Answer Answer Gross profit Answer Answer b Prepare gross profit computations for Year and Year using variable costing. Do not use negative signs with your answers. Variable Costing Year Year Sales Answer Answer Variable cost of goods sold: Beginning inventory Answer Answer Production Answer Answer Goods available Answer Answer Less: Ending inventory Answer Answer Variable cost of goods sold Answer Answer Less: Fixed manufacturing costs Answer Answer Gross profit Answer Answer c Explain how your answers illustrate the impact of differences between production and sales volumes on the gross profits reported each year under absorption and variable costing. Select the most appropriate statement. If production volume exceeds sales volume, the absorption costing gross profit will be higher than the variable costing gross profit. If sales volume exceeds production volume, the absorption costing gross profit will be higher than the variable costing gross profit. If production volume exceeds sales volume, the variable costing gross profit will be higher than the absorption costing gross profit. If sales volume exceeds production volume, the variable costing gross profit will be lower than the absorption costing gross profit.
Scott Manufacturing makes only one product with total unit manufacturing costs of $ of which $ is variable. No units were on hand at the beginning of Year During Year and Year the only product manufactured was sold for $ per unit, and the cost structure did not change. Scott uses the firstin firstout inventory method and has the following production and sales for Year and Year :
Units Manufactured Units Sold
Year
Year
a Prepare gross profit computations for Year and Year using absorption costing.
Do not use negative signs with your answers.
Absorption Costing
Year Year
Sales Answer
Answer
Cost of goods sold:
Beginning inventory Answer
Answer
Production Answer
Answer
Goods available Answer
Answer
Less: Ending inventory Answer
Answer
Cost of goods sold Answer
Answer
Gross profit Answer
Answer
b Prepare gross profit computations for Year and Year using variable costing.
Do not use negative signs with your answers.
Variable Costing
Year Year
Sales Answer
Answer
Variable cost of goods sold:
Beginning inventory Answer
Answer
Production Answer
Answer
Goods available Answer
Answer
Less: Ending inventory Answer
Answer
Variable cost of goods sold Answer
Answer
Less: Fixed manufacturing costs Answer
Answer
Gross profit Answer
Answer
c Explain how your answers illustrate the impact of differences between production and sales volumes on the gross profits reported each year under absorption and variable costing.
Select the most appropriate statement.
If production volume exceeds sales volume, the absorption costing gross profit will be higher than the variable costing gross profit.
If sales volume exceeds production volume, the absorption costing gross profit will be higher than the variable costing gross profit.
If production volume exceeds sales volume, the variable costing gross profit will be higher than the absorption costing gross profit.
If sales volume exceeds production volume, the variable costing gross profit will be lower than the absorption costing gross profit.
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