Question
Sunrise Pools and Spas manufactures fibreglass forms for in-ground pools and swim spas for all-season use. Data regarding inventory, production and sales in units follows:
Sunrise Pools and Spas manufactures fibreglass forms for in-ground pools and swim spas for all-season use. Data regarding inventory, production and sales in units follows:
| December | January | February | March |
Beginning inventory in units |
| 1,000 | 2,500 | 7,700 |
Production in units | 10,000 | 15,000 | 18,000 | 12,000 |
Sales in units |
| 13,500 | 12,800 | 17,900 |
Ending inventory in units |
| 2,500 | 7,700 | 1,800 |
Variable manufacturing costs per unit were $5.00, variable selling expenses per unit were $2.00, and fixed manufacturing overhead was $54,000 per month and has been for the past eight months.
Required:
1. Calculate the fixed overhead per unit for December, January, February and March. (1 mark) Use two decimals when recording amounts per unit, i.e. 1.75.
December | January | February | March | |
$ | $ | $ | $ | |
Fixed overhead per unit | $ | $ | $ | $ |
2. Calculate the amount of fixed overhead contained in beginning inventory for January, February and March. (3 marks) Use two decimals when recording amounts per unit, i.e 1.75.
January | February | March | |
$ | $ | $ | |
Fixed overhead in beginning inventory | $ | $ | $ |
3. Calculate the amount of fixed overhead contained in ending inventory for January, February and March. (3 marks) Use two decimals when recording amounts per unit, i.e. 1.75.
January | February | March | |
$ | $ | $ | |
Fixed overhead in ending inventory | $ | $ | $ |
4. Calculate the absorption costing operating income or loss for January, February and March. (3 marks) Enter negative numbers with a minus sign in front of them, i.e. -10000.
4 | January | February | March |
_Variable costing operating income (loss) | -$11,000 | -$6,000 | $14,000 |
Add: | |||
Deduct: | |||
Absorption costing operating income (loss) | $ | $ | $ |
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