Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The vice-president for sales of Huber Corporation has received the following income statement for November, which was prepared on a variable-costing system. The firm has

image text in transcribed

image text in transcribed

image text in transcribed

The vice-president for sales of Huber Corporation has received the following income statement for November, which was prepared on a variable-costing system. The firm has just adopted variable costing for its internal reporting. HUBER CORPORATION Income Statement For the Month of November (in thousands) Sales $2,400 1,200 1,200 600 Less variable cost of goods sold Contribution margin Less fixed manufacturing costs at budget Gross margin Less fixed selling and administrative costs Net income before taxes 600 400 $200 The controller attached the following notes with the statements: 1. The unit sales price for November averaged $24. The unit manufacturing costs for the month were as follows: 2. $12 Variable costs Fixed costs applied Total cost 4 $16 3. 4. The unit rate for fixed manufacturing costs is a predetermined rate based on a monthly production of 150,000 units. The variable costs per unit have been stable all year. Production for November was 45,000 units in excess of sales. The inventory at November 30 was 80,000 units. 5. 6. (a) The vice-president for sales is not comfortable with the variable-costing system and wonders what the net income would have been under the previous absorption-costing system. 1. Present the November income statement on an absorption-costing basis. HUBER CORPORATION Absorption-Costing Income Statement For the Month Ended November 30, 2020 Sales in units 2400 Cost of Goods Sold $ 1241.38 Less $ 2. Reconcile and explain the difference between the variable-costing and absorption-costing net income figures. Variable-costing net income $ $ FMOH deferred in ending inventory FMOH released from beginning inventory Absorption-costing net income $ $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate Accounting Volume 2

Authors: Hanlon, Hodder, Nelson, Roulstone, Dragoo

2nd Edition

1618533134, 9781618533357

More Books

Students also viewed these Accounting questions

Question

Define orientation, and explain the purposes of orientation.

Answered: 1 week ago

Question

What are the various career paths that individuals may use?

Answered: 1 week ago