13-45 Variable and Absorption Costing Chan Manufacturing Company data for 20X7 f
ID: 2435026 • Letter: 1
Question
13-45 Variable and Absorption Costing
Chan Manufacturing Company data for 20X7 follow:
Sales: 12,000 units at $17 each
Actual production 15,000 units
Expected volume of production 18,000 units
Manufacturing costs incurred
Variable $120,000
Fixed 63,000
Nonmanufacturing costs incurred
Variable $ 24,000
Fixed 18,000
1. Determine operating income for 20X7, assuming the firm uses the variable-costing approach to
product costing. (Do not prepare a statement.)
2. Assume that there is no January 1, 20X7, inventory; no variances are allocated to inventory; and
the firm uses a “full absorption” approach to product costing. Compute (a) the cost assigned to
December 31, 20X7, inventory;
Explanation / Answer
1. Determine operating income for 20X7, assuming the firm uses the variable-costing approach to product costing. (Do not prepare a statement.) $15,600 2. Assume that there is no January 1, 20X7, inventory; no variances are allocated to inventory; and the firm uses a “full absorption” approach to product costing. Compute (a) the cost assigned to December 31, 20X7, inventory; Manufacturing costs incurred Variable $120,000 Fixed 63,000 $183,000 Nonmanufacturing costs incurred Variable $ 24,000 Fixed 18,000 $ 42,000 Total Cost incurred $225,000 ====== Units Manufactured 15,000 Manufacturing cost per unit $15 Ending Inventory cost $45,000
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.