Question
Waltman Company provided the following data for their metal brackets: Units in beginning finished goods inventory900Cost per unit?Units produced60,000Units sold ($13.50 per unit)56,000Variable costs per
Waltman Company provided the following data for their metal brackets:
Units in beginning finished goods inventory900Cost per unit?Units produced60,000Units sold ($13.50 per unit)56,000Variable costs per unit produced:Direct materials$1.80Direct labor0.90Variable overhead0.30Variable selling expenses (per unit sold)$0.10Fixed costs:Fixed overhead incurred$216,000Fixed selling and administrative$72,000
Required:
Using variable costing, answer the following:
1. Calculate the per-unit product cost (round to the nearest cent):
2. Calculate the units in ending finished goods inventory:
3. Calculate the cost of ending finished goods (round to the nearest dollar):
4. Answer the following:
Waltman Company
Variable-Costing Income Statement
Sales
Less variable expenses:
Variable cost of goods sold
Variable selling and administrative expenses
Contribution margin
Less fixed expenses
Fixed overhead
Fixed selling and administrative
Operating Income
Scenario 3
Reconcile the income using the variable costing versus absorption costing as calculated above:
Operating Income using Variable Costing:
Fixed Overhead in Opening Inventory:
Fixed Overhead in Ending Inventory:
Change in fixed overhead:
Operating income using Absorption Costing:
Fixed Overhead in opening Inventory =
Fixed Overhead in ending inventory =
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