Please help me answer this question Breedon Corporation produces a single produc

Question

Please help me answer this question

Breedon Corporation produces a single product. Data concerning the company's operations last year appear below: Required: a. Compute the unit product cost under both absorption and variable costing. b. Prepare an income statement for the year using absorption costing. c. Prepare a contribution format income statement for the year using variable costing. d. Prepare a report reconciling the difference in net operating income between absorption and variable costing for the year.

Explanation / Answer

COMPUTATION OF UNIT PRODUCT COST Absorption Costing Variable Costing Dirct Material $20 $20 Dirct Labor $10 $10 Variable manufacturing overhead $8 $8 Fixed Manufacturing Overhead $15         Unit Product Cost $53 $38 Income Statement ( Absorption Costing Method) Sales (11,250 units @ $90 each) $10,12,500 Less: Cost of goods Manufactured Dirct Material $2,40,000 Dirct Labor $1,20,000 Variable manufacturing overhead $96,000 Fixed Manufacturing Overhead $1,80,000     $6,36,000 Less: Ending Inventory $39,750          Cost of goods sold $5,96,250 Gross Profit $4,16,250 Less: Selling & Admin expense       Variable $56,250       Fixed $1,50,000 Total selling & Admin expense $2,06,250 Net Income $2,10,000 Income Statement ( Variable Costing Method) Sales (11,250 units @ $90 each) $10,12,500 Less: Variable Costs Dirct Material $2,25,000 Dirct Labor $1,12,500 Variable manufacturing overhead $90,000 Selling & Admin Expenses $56,250     $4,83,750 Contribution Margin $5,28,750 Less: Fixed Costs        Manufactuirng Overhead $1,80,000         Selling & Admin Expense $1,50,000 Total selling & Admin expense $3,30,000 Net Income $1,98,750 Reconcilation Report Net Income as per Absorption Costing Method $2,10,000 Less: Fixed manufactured overhead transffered with ending inventory $11,250 Net Income as per Variable Costing Method $1,98,750

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.