Explain the reason for any difference in the ending

Reference no: EM13589635

Wiengot, Inc., produces and sells a unique type of TV antenna. The company has just opened a new plant to manufacture the antenna, and the following cost and revenue data have been provided for the first month of the plant's operation in the form of a worksheet.

Beginning inventory	0
Units produced ....................................................	40,000
Units sold ............................................................	35,000
Selling price per unit ............................................	$60
Selling and administrative expenses:
Variable per unit ..............................................	$2
Fixed (total) ....................................................	$560,000
Manufacturing costs
Direct materials cost per unit ............................	$15
Direct labor cost per unit ..................................	$7
Variable manufacturing overhead cost per unit ...	$2
Fixed manufacturing overhead cost (total) .........	$640,000

Because the new antenna is unique in design, management is anxious to see how profitable it will be and has asked that an income statement be prepared for the month.

Required:

1.Assume that the company uses absorption costing.

a.Determine the unit product cost.

b.Prepare an income statement for the month.

2.Assume that the company uses variable costing.

a.Determine the unit product cost.

b.Prepare a contribution format income statement for the month.

3. Explain the reason for any difference in the ending inventory balances under the two costing methods and the impact of this difference on reported net operating income.

Reference no: EM13589635

Questions Cloud

A de facto corporation is an entity that fails to : a de facto corporation is an entity that fails to substantially comply with the rules on formation. some states

How much gross profit will the company recognize in the : 1. a construction company entered into a fixed-price contract to build an office building for 44 million. construction

Disk productions needs to know its anticipated cash inflows : disk productions needs to know its anticipated cash inflows for the next quarter by month. cash sales are 10 percent of

Sarjit systems sold software to a customer for 155000 as : charter corporation which began business in 2016 appropriately uses the installment sales method of accounting for its

Explain the reason for any difference in the ending : wiengot inc. produces and sells a unique type of tv antenna. the company has just opened a new plant to manufacture the

Explain why you chose to do either a metric or a us : choose and post one of the followingif you believe that metric conversions are easier write and post a metric

On july 1 2013 apache company sold a parcel of undeveloped : on july 1 2013 apache company sold a parcel of undeveloped land to a construction company for 4300000. the book value

Morrow corporation makes all sales on account the june 30th : morrow corporation makes all sales on account. the june 30th balance sheet balance in its accounts receivable is 400000

Arris companys standard variable overhead rate is 6 per : harris companys standard variable overhead rate is 6 per direct labor hour and each unit requires 2 standard direct

User Account

All Pages