Homework SourseThe selling price per unit is 3600 The budgeted level of pro
The selling price per unit is $3600. The budgeted level of production used to calculate the budgeted fixed mfg cost per unit is 1000 units. THere are no price, efficiency, or spending variances. Any PVV is written off to COGS in the month in which it occurs.
(a) Prepare income statements for High-Tech in Jan, Feb, and Mar of 2014 under variable costing.
(b) Prepare income statements for High-Tech in Jan, Feb, and Mar of 2014 under absorption costing.
PLEASE HELP! I am having problems with getting the information for the absorption costing. I have the info for part (a). I appreciate the help!
| Jan | Feb | Mar | |
| Unit Data | |||
| Beginning Inv | 0 | 100 | 100 |
| Production | 1000 | 950 | 1020 |
| Sales | 900 | 950 | 1030 |
| Variable Costs | |||
| Mfg Cost per unit produced | 700 | 700 | 700 |
| Op (marketing)cost per unit sold | 525 | 525 | 525 |
| Fixed costs | |||
| Mfg costs | 420,000 | 420,000 | 420,000 |
| Op (marketing) costs | 110,000 | 110,000 | 110,000 |
Solution
b. Income Statements for High-Tech:
Cost of production per unit = Variable manufacturing cost per unit + predermined fixed manufacturing overhead rate
= 700 + 420,000 / 1,000 = $ 1,120
Jan: Cost of goods sold = 900 x 1,120 = $ 1,008,000
Feb: Cost of goods sold = 950 x 1,120 = $ 1,064,000
Mar: Cost of goods sold = 1,030 x 1,120 = $ 1,153,600
| Jan | Feb | Mar | |
| Sales | 3,240,000 | 3,420,000 | 3,708,000 |
| Cost of goods sold | 1,008,000 | 1,064,000 | 1,153,600 |
| Gross profit | 2,232,000 | 2,356,000 | 2,554,400 |
| Less | |||
| Variable marketing cost | 472,500 | 498,750 | 540,750 |
| Fixed marketing cost | 110,000 | 110,000 | 110,000 |
| Income from operations | 1,649,500 | 1,747,250 | 1,903,650 |
