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The Raptor Compnay had the following results for its first two years of operation: In year 1, the company sold 40,000 units of product In
The Raptor Compnay had the following results for its first two years of operation: In year 1, the company sold 40,000 units of product In year 1, the company produced 40,000 units of product In year 2, the company sold 40,000 units of product In year 2, the company produced 60,000 units of product Variable production cost is $5.00 per unit Fixed manufacturing overhead cost is $620,000 a year Fixed manufacturing overhead cost is $150,000 Variable selling and administrative expense $2.00 per unit sold Required: Compute the unit product cost for each year under absorption costing and under variable costing (round to the nearest whole number) Information given Selling Price per unit sold $30 Variable production cost per unit produced $5 Fixed manufacturing overhead costs per year (620,000 / 40,000); (620,000 / 60,000) $620,000 Fixed manufacturing overhead cost (150,000 / 40,000); (150,000 / 60,000) $150,000 Variable selling and administrative expenses per unit sold $2 Year 1 Year 2 Units in beginning inventory - - Units produced 40,000 60,000 Units sold 40,000 40,000 Units in ending inventory - 20,000
| The Raptor Compnay had the following results for its first two years of operation: | ||
| In year 1, the company sold 40,000 units of product | ||
| In year 1, the company produced 40,000 units of product | ||
| In year 2, the company sold 40,000 units of product | ||
| In year 2, the company produced 60,000 units of product | ||
| Variable production cost is $5.00 per unit | ||
| Fixed manufacturing overhead cost is $620,000 a year | ||
| Fixed manufacturing overhead cost is $150,000 | ||
| Variable selling and administrative expense $2.00 per unit sold | ||
| Required: | ||
| Compute the unit product cost for each year under absorption costing and under variable costing (round to the nearest whole number) | ||
| Information given | ||
| Selling Price per unit sold | $30 | |
| Variable production cost per unit produced | $5 | |
| Fixed manufacturing overhead costs per year (620,000 / 40,000); (620,000 / 60,000) | $620,000 | |
| Fixed manufacturing overhead cost (150,000 / 40,000); (150,000 / 60,000) | $150,000 | |
| Variable selling and administrative expenses per unit sold | $2 | |
| Year 1 | Year 2 | |
| Units in beginning inventory | - | - |
| Units produced | 40,000 | 60,000 |
| Units sold | 40,000 | 40,000 |
| Units in ending inventory | - | 20,000 |
| Year 1 | Year 2 | |
| Sales | $1,200,000 | $1,200,000 |
| Cost of goods sold | $600,000 | $600,000 |
| Gross margin | $600,000 | $600,000 |
| Selling and administrative expense | $200,000 | $200,000 |
| Operating income | $400,000 | $400,000 |
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Managerial Accounting
Authors: Karen W. Braun, Wendy M. Tietz
7th Edition
0137858515, 9780137858514
