1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
iogann1982 [59]
3 years ago
12

Exercise 7-9 Variable and Absorption Costing Unit Product Costs and Income Statements [LO7-1, LO7-2, LO7-3]

Business
1 answer:
Reil [10]3 years ago
6 0

Answer:

1 a. Year 1 unit product cost = 45

     Year 2 unit product cost = 45

Notes: Unit product cost = Direct materials + direct labor + Variable manufacturing overhead = 25 + 15 + 5 = 45 units

1 b.                        Income statement

                                                     Year 1           Year 2

Sales                                         2,400,000    3,000,000

(40000*60); (50000*60)

Less:

Variable cost of goods sold     1,800,000     2,250,000    

Variable selling and adm.          80,000         100,000

Contribution margin                520,000        650,000

Less:

Fixed manufacturing overhead  250,000      250,000    

Fixed selling & adm expense      80,000         80,000

Net income                                  $190,000     $320,000

2 a.  Notes

                                                             Year 1   Year 2

Direct materials                                      25     25  

Direct labor                                              15     15  

Variable manufacturing overhead         5         5  

Fixed manufacturing overhead             <u> 5      6.25</u>

(250,000/50,000); (250,000/40000)

Unit product cost                                    50    51.25

b.                                 Income statement

                                              Year 1         Year 2

Sales                                   2400000    3000000

Less: cost of goods sold   <u>2000000</u>    <u>2550000</u>

Gross margin                      400,000     450,000

Less: Selling and                <u>160,000</u> <u> 180,000</u>

administrative expense  

Net income                         240,000     270,000

Workings

Cost of goods sold for year 2 = (10,000* 50) + (40000 * 51.25)

= 500,000 + 2,050,000

= 25,500,000

3. Reconciliation                                Year 1          Year 2

Variable costing net operating        190,000      320,000

income (loss)    

Add: Deferred fixed overhead          50,000

in ending inventory (10000*5)  

Less: Fixed overhead realized        <u>                     -50,000</u>

in beginning inventory(10000*5)

Absorption costing net operating   $240,000    270,000

income (loss)  

You might be interested in
1. What is capital ?
Vlad1618 [11]
Capital is a different way to call Money
6 0
3 years ago
Suppose Specific Automakers is considering signing a long-term contract with the union representing its workers. Specific Automa
natka813 [3]

Answer: Worsen; benefits

Explanation:

Specific Automakers is signing a long term contract with the union who are the representative of workers.

Real wages should increase by = 2%

Expected inflation = 5%

Nominal wage increase = 7%

Actual inflation = 6%

Actual inflation is greater than expected inflation, so this would worsen the union and it is beneficial for the automakers because now real wage increase is only:

= Nominal wage - Actual inflation rate

= 7% - 6%

= 1%

This is an example of re-distributive cost of inflation.

8 0
3 years ago
If goods in transit are shipped FOB destination
AleksandrR [38]

Answer:

b. the seller has legal title to the goods until they are delivered.

Explanation:

When the goods are in the transit and are shipped FOB destination, the title of the goods would be with the seller. If the goods are delivered, then the legal title would be transferred from the seller to the buyer. Until the goods are in transit, the legal title is with the seller itself.  

Both the parties are eligible for the legal title. It can be either a buyer or seller depending upon the situations

Hence, the correct option is b and the rest options are wrong

5 0
2 years ago
Target donates millions of dollars each year in education-related grants for arts and cultural experiences, field trips, and rea
melomori [17]

Answer:

<u><em>Philanthropy</em></u>

Explanation:

Target donates millions of dollars each year in education - related grants for arts and cultural experiences , field trips , and reading programs , as well as grants to promote public safety . This is an example of<u> Philanthropy.</u>

Philanthropy means giving things like money or any kind of gift to people for are need of that.

Philanthropy is good , it helps in solving the social problem .

There is a little difference is charity and Philanthropy , that is , Charity is short - term while Philanthropy is long - term. Charity tends to be emotional and have immediate response on the other hand philanthropy is more strategical .

<em>Philanthropy always focuses on eliminating social problem.</em>

8 0
3 years ago
Carl Critic has just announced his choices of the worst Hollywood actresses of the year, and Stella Starr has been named the wor
Alekssandra [29.7K]

Answer: No, this was merely Carl's opinion.

Explanation:

Labelling a statement as an opinion generally protects the person who said it from defamation suits however this is not always the case.

If the opinion is based on disclosed and well known facts, the action is free of defamatory or libel charges.

This seems to be the case in this scenario as his column seems to be based on the performances for the year.

Bottomline is, Stella cannot sue Carl for libel as it is his opinion.

7 0
2 years ago
Other questions:
  • Fin has been a new manager for a couple of weeks. over time, he realizes his team likes to socialize during meetings, which tend
    10·1 answer
  • Product innovation refers to efforts to create designs and applications of technology to develop new products, while __________
    10·1 answer
  • How does a country's GDP help you determine if its economy is strong or weak?
    8·2 answers
  • Assume $1 is currently equal to A$1.1024 in the spot market. Also assume the expected inflation rate in Australia is 2.8 percent
    11·1 answer
  • PLEASE HELP TO ADD THE MISSING BOX
    12·1 answer
  • A candy company called Hearts Aflame Inc. forms an agreement with
    5·1 answer
  • Does anyone know anything on accounting????
    13·1 answer
  • Assume that there are four consumers A, B, C, and D, and the prices that each of them is willing to pay for a glass of lemonade
    6·1 answer
  • A questionnaire on the negative impact of the coronavirus as one of the socio economic issues of the business
    9·1 answer
  • How does a fixed exchange rate set the value for a currency?
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!