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2 years ago

PB13.

Business

1 answer:

Nat2105 [25]2 years ago

3 0

Answer:

Submarine Company

Income statement under absorption costing

$ $

Sales (1,800 units x $150) 270,000

Less: Full cost:

Direct material (2,000 units x $40) 80,000

Direct labour (2,000 units x $50) 100,000

Variable overhead (2,000 units x $10) 20,000

Fixed overhead (2,000 units x $20) 40,000

240,000

Less: Closing stock (200 units x $120) 24,000 216,000

Gross profit 54,000

Less: Selling and administrative expenses:

Variable selling and administrative 36,000

Fixed selling and administrative expenses 15,000 51,000

Net profit 3,000

Submarine Company

Income statement using marginal costing

$ $

Sales (1,800 units x $150) 270,000

Less: Variable costs:

Direct material (2,000 units x $40) 80,000

Direct labour (2,000 units x $50) 100,000

Variable overhead (2,000 units x $10) 20,000

200,000

Less: Closing stock (200 units x $100) 20,000

180,000

Add: Variable selling and administrative 36,000 216,000

Contribution 54,000

Less: Fixed cost:

Fixed production cost 40,000

Fixed selling and administrative expenses 15,000 55,000

Net loss  (1,000) 

Profit reconciliation statement

Closing stock Net profit/loss

$ $

Absorption costing 24,000 3,000

Less: Marginal costing 20,000 (1,000)

Difference 4,000   4,000

The difference of $4,000 in net profit is as a result of $4,000 difference in closing inventory.

Explanation:

In marginal costing, variable costs are deducted from sales in order to obtain the contribution margin. Net profit is calculated by deducting fixed costs from the contribution margin. Closing stock is valued at marginal cost per unit in marginal costing. Closing stock is the difference between production units and sales units. Marginal cost is the sum total of all variable costs.

In absorption costing, full costs are deducted from sales in order to obtain the gross profit. Net profit is the difference between gross profit and selling and administrative expenses. Closing stock is valued at full cost in absorption costing. Full cost is the aggregate of variable costs per unit and fixed costs per unit.

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Answer:

sell bonds, increase discount rates and increase reserve requirements

Explanation:

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3 years ago

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Answer:

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2 years ago

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Answer:

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3 years ago

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Answer:

Large Medium Small

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Unit variable cost 130 120 76

Unit contribution margin $54 $40 $24

Autoclave hours per unit 3 2 1

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Answer:

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