Cost and sales data for the first month

Assignment Help Financial Accounting

Reference no: EM13915684

Absorption & Variable Costing

A BBQ manufacturer makes and sells BBQ's and accessories. The company recently announced a new plan to manufacture a dual purpose propane/charcoal BBQ conversion kit. Cost and sales data for the first month of operations April 2017 are as follows:

Manufacturing Costs

Fixed overhead	$200,000
Variable overhead	$4 per kit
Direct labour	$16 per kit
Direct material	$40 per kit
Beginning inventory	0 kits
Kits produced	10,000
Kits sold	9,000
Selling and administrative costs
Fixed	$400,000
Variable	$6 per kit sold

The conversion kit sells for $150. Management is interested in the opening month's results and has asked for an income statement.

Required:

a) Assume the company uses absorption costing:

1. Calculate the manufacturing cost per unit

2. Prepare an absorption--costing income statement for the month of April 2017

b) Assume the company uses variable costing:

1. calculate the variable manufacturing cost per unit.

2. prepare a variable--costing income statement for the month of April 2017

c) Reconcile the difference in net income between the absorption and variable costing.

Reference no: EM13915684

Questions Cloud

Total interest : What is the total interest (360-day year) on a $1,500, 12%, 120-day note?

What are the possible values for det : Let A be a n × n orthogonal matrix.What are the possible values for det(A)?

Individuals develop a self-concept and self-schema : Social psychologists are interested in who we are. Our sense of self is affected by what we know about the self and by the people around us. The self is a powerful force. The self affects how we feel, what we think we can do, and what we in fact d..

Multiple step income statement : multiple-step income statement, single-step income statement, and statement of retained earnings, In the space below, prepare the following statements for the year ended June 30, 2014:

Cost and sales data for the first month : The company recently announced a new plan to manufacture a dual purpose propane/charcoal BBQ conversion kit. Cost and sales data for the first month of operations April

Elements of g : If the order of x is 36, what are the orders of the following elements of G: x^-1, x^15? Explain your answers

What is the order of the permutation : What is the order of the permutation (867)(12345) in the symmetric group S10?

Relationship between personal attitudes-resulting behaviors : Reflect on the relationship between personal attitudes and resulting behaviors, using the Theory of Planned Behavior, Cognitive Dissonance Theory, and Self-Perception Theory as your references.

Interest is payable semiannually : On the first day of its fiscal year, Robbins Company issued $2,600,000 of 5-year, 7% bonds to finance its operations of producing and selling home improvement products. Interest is payable semiannually.

User Account

All Pages