






















Study with the several resources on Docsity
Earn points by helping other students or get them with a premium plan
Prepare for your exams
Study with the several resources on Docsity
Earn points to download
Earn points by helping other students or get them with a premium plan
Community
Ask the community for help and clear up your study doubts
Discover the best universities in your country according to Docsity users
Free resources
Download our free guides on studying techniques, anxiety management strategies, and thesis advice from Docsity tutors
Chapter 7 power point notes Material Type: Notes; Class: Managerial Accounting; Subject: Accounting; University: Pittsburg State University; Term: Forever 1989;
Typology: Study notes
1 / 30
This page cannot be seen from the preview
Don't miss anything!
© 2010 The McGraw-Hill Companies, Inc.
Which method will produce the highest values for work in process and finished goods inventories? a. Absorption costing. b. Variable costing. c. They produce the same values for these inventories. d. It depends... Which method will produce the highest values for work in process and finished goods inventories? a. Absorption costing. b. Variable costing. c. They produce the same values for these inventories. d. It depends...
Which method will produce the highest values for work in process and finished goods inventories? a. Absorption costing. b. Variable costing. c. They produce the same values for these inventories. d. It depends... Which method will produce the highest values for work in process and finished goods inventories? a. Absorption costing. b. Variable costing. c. They produce the same values for these inventories. d. It depends...
Unit product cost is determined as follows:
Sales (20,000 × $30) $600, Less variable expenses: Beginning inventory $ - Add COGM (25,000 × $10) 250, Goods available for sale 250, Less ending inventory (5,000 × $10) 50, Variable cost of goods sold 200, Variable selling & administrative expenses (20,000 × $3) 60,000 260, Contribution margin 340, Less fixed expenses: Manufacturing overhead $150, Selling & administrative expenses 100,000 250, Net operating income $ 90,
Sales (20,000 × $30) $600, Less variable expenses: Beginning inventory $ - Add COGM (25,000 × $10) 250, Goods available for sale 250, Less ending inventory (5,000 × $10) 50, Variable cost of goods sold 200, Variable selling & administrative expenses (20,000 × $3) 60,000 260, Contribution margin 340, Less fixed expenses: Manufacturing overhead $150, Selling & administrative expenses 100,000 250, Net operating income $ 90, Variable manufacturing costs only. All fixed manufacturing overhead is expensed.
We can reconcile the difference between absorption and variable income as follows:
Since the variable costs per unit, total fixed costs, Since the variable costs per unit, total fixed costs, and the number of units produced remained and the number of units produced remained unchanged, the unit cost computations also unchanged, the unit cost computations also remain unchanged. remain unchanged.
Absorption Costing Sales (30,000 × $30) $900, Less cost of goods sold: Beg. inventory (5,000 × $16) $ 80, Add COGM (25,000 × $16) 400, Goods available for sale 480, Less ending inventory - 480, Gross margin 420, Less selling & admin. exp. Variable (30,000 × $3) $ 90, Fixed 100,000 190, Net operating income $230, Absorption Costing Sales (30,000 × $30) $900, Less cost of goods sold: Beg. inventory (5,000 × $16) $ 80, Add COGM (25,000 × $16) 400, Goods available for sale 480, Less ending inventory - 480, Gross margin 420, Less selling & admin. exp. Variable (30,000 × $3) $ 90, Fixed 100,000 190, Net operating income $230,
Unit product cost.
We can reconcile the difference between absorption and variable income as follows: