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solong [7]
2 years ago
5

Mahugh Corporation, which has only one product, has provided the following data concerning its most recent month of operations:

Business
1 answer:
Anna11 [10]2 years ago
7 0

Answer:

a. $77

b. $101

c.Income statement for the month using the contribution format and the variable costing method.

Sales ( $122 × 8,200)                                                                       1,000,400

Less Cost of Sales

Opening Stock                                                                      0

Add Cost of Goods Manufactured (8,300× $77)           639,100

Less Closing stock ( 100 × $77)                                        (7,700)    (631,400)

Contribution                                                                                       369,000

Less Expenses

Fixed manufacturing overhead                                                      ($199,200)

Variable selling and administrative ($7×8,200)                                (57,400)

Fixed selling and administrative                                                    ($106,600)

Net Income / (Loss)                                                                                5,800

d.Income statement for the month using the absorption costing method.

Sales ( $122 × 8,200)                                                                       1,000,400

Less Cost of Sales

Opening Stock                                                                      0

Add Cost of Goods Manufactured (8,300× $101)           838,300

Less Closing stock ( 100 × $101)                                        (10,100) (828,200)

Contribution                                                                                       172,200

Less Expenses

Variable selling and administrative ($7×8,200)                                (57,400)

Fixed selling and administrative                                                    ($106,600)

Net Income / (Loss)                                                                                8,200

e.Reconcile the variable costing and absorption costing operating incomes for the month

Absorption Costing Net Profit                                                               8,200

Add Fixed Costs in Opening Stock                                                           0

Less Fixed Costs in Closing Stock (100 × $24)                                   (2,400)

Variable Costing Net Profit                                                                    5,800

Explanation:

Product Cost (Variable Costing) = All Variable Manufacturing Costs

                                                     = $27 + $46 + $4

                                                     = $77

Product Cost (Absorption Costing) = All Variable Manufacturing Costs + All Fixed Manufacturing Costs

                                                          = $77 + ($199,200/8,300)

                                                          = $77 + $24

                                                          = $101

Income Statements

Non Manufacturing Costs are treated as a Periodic Cost in Absorption Costing Income Statement

Whilst Both Fixed Manufacturing Costs and Non Manufacturing Costs are treated as a Periodic Cost in Variable Costing Income Statement.

Reconciliation

The difference in Profit is due to Fixed Cost component absorbed in Absorption Costing.

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Answer:

See the explanation below:

Explanation:

1. Prepare journal entries to record the following transactions for Sherman Systems

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<u><em>To record the repurchase of own common stock                            </em></u>

b. Sold 1,125 treasury shares on November 1 for $36 cash per share.

<u>Details                                                            Dr ($)               Cr ($)     </u>

Cash (1,125 × 36)                                            40,500

Treasury Stock (1,125 × 30)                                                  33,750

Paid-in Capital from Sale of Treasury Stock                        6,750

<em><u>To record the sale of treasury stock.                                                      </u></em>

c. Sold all remaining treasury shares on November 25 for $25 cash per share.

<u>Details                                                                Dr ($)               Cr ($)     </u>

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Paid-in Capital from Sale of Treasury Stock       6,750

Retained Earnings                                                15,125

Treasury Stock 99,000 (4,375 × 30)                                       131,250

<em><u> To record the sale of the remaining treasury shares                               </u></em>

Kindly note that there is a balance of $6,750 in the Treasury Stock Paid-in Capital account. Since it is utilized, the remaining deficit will show in Retained Earnings.

2. Prepare the stockholders' equity section after the October 11 treasury stock purchase.

<u>Details                                                                                            $     </u>

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Alex73 [517]

Answer:

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Marrrta [24]

Answer:

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BEP

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Answer: Please see answer in the expalantion column

Explanation:

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