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3 years ago

Income statement under absorption costing and variable costing

Business

1 answer:

Len [333]3 years ago

4 0

Answer:

unitary product cost= $102

Explanation:

Giving the following information:

Manufacturing costs Direct materials per unit $60

Direct labor per unit $22

Variable overhead per unit $8

Fixed overhead for the year $528,000

Units produced= 44,000

The absorption costing method includes all costs related to production, both fixed and variable. The unit product cost is calculated using direct material, direct labor, and total unitary manufacturing overhead.

First, we need to calculate the unitary fixed overhead:

Unitary fixed overhead= 528,000/44,000= $12

Now, the unitary product cost:

unitary product cost= 60 + 22 + 8 + 12

unitary product cost= $102

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3 years ago

At the beginning of the year, Rangle Company expected to incur $59,000 of overhead costs in producing 5,900 units of product. Th

kaheart [24]

Answer: Total cost of the units made in January = $38,500

Explanation:

Given that,

At the beginning of the year, overhead costs = $59,000

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Direct material cost = $25 per unit

Direct labor cost = $35 per unit

Units produced during January = 550 units

Predetermined overhead rate = $\frac{Total\ expected\ overhead\ cost}{Number\ of\ units}$

= $\frac{59000}{5900}$

= $10 per unit

Now,

Costs incurred in January:

Direct material cost = $25 per unit × 550 units = $13750

Direct labor cost = $35 per unit × 550 units = $19250

Overhead cost = $10 per unit × 550 units = $5500

∴ Total cost of the units made in January = Direct material cost + Direct labor cost + Overhead cost

= 13750 + 19250 + 5500

= $38,500

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3 years ago