The selling price per vehicle is $27,000. The budgeted level of production used

Question

The selling price per vehicle is $27,000. The budgeted level of production used to calculate the budgeted fixed manufacturing cost per unit is 70” units. There are no price, efficiency or spending variances. Any production- volume variance is writtin off to cost of goods sold in the month in which it occurs. 1) Prepare April and May income statements under variable costing. ( I completed) 2) Prepare April and May under absorption costing. l data relating to April and May 2017 are as follows: Data Table April May Unit data: Beginning inventory Production Sales 100 650 700 700 600 Variable costs: Manufacturing cost per unit produced S 9,500 S9,500 Operating (marketing) cost per unit sold 2 400 2.400 Fixed costs: Manufacturing costs Operating (marketing) costs S 2100000 S 2100,000 650000650 000 PrintDone nswer

Explanation / Answer

April May Revenues 600*27000 16200000 700*27000 18900000 Cost of Goods Sold Beginning Inventory 100*12500 1250000 Variable Manufacturing Cost 700*9500 6650000 650*9500 6175000 Allocated Fixed Manufdacturing Cost 700*3000 2100000 650*3000 1950000 Cost of goods available for Sale 8750000 9375000 Deduct : Closing Inventory 100*(9500+3000) 1250000 50*12500 625000 Production Volume Variance Add:Unfavourable 0 v 150000 Cost of Goods Sold 7500000 8900000 Variable Marketing Cost 600*2400 1440000 650*2400 1560000 Fixed Operating Marketing Cost 650000 650*1000 650000 Total Oerating Cost 2090000 2210000 Operating Income 6610000 7790000 Maufacturing Overhead Absorption Rate 2100000/700 3000

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