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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)  

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Answer:

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Explanation:

The given problem seems to be incomplete. Find the attachment of the complete question below.

Given:

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3 years ago
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Money needs to be transferred from 1 agency to other when legislature is not in session:

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3 years ago
Hubert lives in San Francisco and runs a business that sells boats. In an average year, he receives $842,000 from selling boats.
aev [14]

Answer:

Explicit costs are normal costs of operating a business.

Implicit costs are opportunity costs meaning that they are the benefits foregone by engaging in a certain course of action.

The wholesale cost for the pianos that Hubert pays the manufacturer ⇒ EXPLICIT COST.

The salary Hubert could earn if he worked as an accountant ⇒ IMPLICIT COST.

The wages and utility bills that Hubert pays ⇒ EXPLICIT COST

The rental income Hubert could receive if he chose to rent out his showroom. ⇒ IMPLICIT COSTS

Accounting Profit = Revenue - Explicit costs

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= $89,000

Economic Profit = Revenue - Explicit costs - Implicit costs

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If Hubert's goal is to maximize his economic profit, he <u>should</u> stay in the piano business because the economic profit he would earn as an accountant would be -$3,000.

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3 years ago
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boyakko [2]

Answer:

Ella can sue The Eating Club since their advertisement contains language that could indicate a preference based on sex, which is a violation of the Equal Employment Opportunity Act. The law prohibits employment discrimination based on gender, race, color, age, sexual orientation, religion, national origin, disability, political beliefs, and marital or familial status.

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Answer:

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