Dance Creations manufactures authentic Hawaian hula skorts that are purchased fo
ID: 2511647 • Letter: D
Question
Dance Creations manufactures authentic Hawaian hula skorts that are purchased for tradtionat Hawaian H celebrations, costume parties , and other functions Dunng its trst year of business, tne compary ncurred the following costs: Variable Cost per Hula Skirt Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative expenses $ 10.15 3.95 1.10 40 Fixed Cost per Month Fbxed manufacturing overhead Fixed selling and adminictrative expenses $18,785 5.500 Dance Creations charges $33 for each skirt that it sells. During the first month of operation, it made 1,700 skirts and sold 1,485 Required: 1. Assuming Dance Creations uses vanable costing, calculate the variable manufacturing cost per unt for last month. (Round your answer to 2 decimal places.) 2. ? a variable costing income statement for last month (Round your answers to 2 decimal places.) Dance Creations Contribution Margin Income Statement For the Last Month O Type here to searchExplanation / Answer
Answer
Unit (Variable Costing)
Direct Material
10.15
Direct Labor
3.95
Variable Manufacturing Overhead
1.1
Per unit Cost
15.2
Income Statement (Variable Costing)
Detail
Net
Sales (@ 33 per unit)
49,005
Less: Cost of Goods Sold
Opening Inventory
-
Add: Cost of goods Manufactured
(1700 Units * $15.2)
25,840
Less: Closing Inventory
(215 units * $15.2)
(3,268)
22,572
Gross Contribution Margin
26,433
Less: Variable Selling and Adm. Expenses
(1485 Units * $0.4)
594
Contribution Margin
25,839
Less: Fixed Cost
Fixed Manufacturing Cost
18,785
Fixed Selling and Adm. Expenses
5,500
24,285
Net Operating Income
1,554
Unit Cost(Absorption Costing)
Year 1
Direct Material
10.15
Direct Labor
3.95
Variable Manufacturing Overhead
1.10
Fixed Manufacturing per unit
($18,785 / 1700 Units)
11.05
Per unit Cost
26.25
Income Statement
Year 1
Detail
Net
Sales
49,005
Less: Cost of Goods Sold
Opening Inventory
-
Add: Cost of goods Manufactured
(1700 Units * $26.25)
44,625
Less: Closing Inventory
(215 Units * $26.25)
(5,644)
38,981
Gross Profit
10,024
Less: Selling and Administrative Cost
Variable Selling and Adm. Expenses
(1485 Units * $0.4)
594
Fixed Selling and Adm. Expenses
5,500
6,094
Net Operating Income
3,930
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Unit (Variable Costing)
Direct Material
10.15
Direct Labor
3.95
Variable Manufacturing Overhead
1.1
Per unit Cost
15.2
Income Statement (Variable Costing)
Detail
Net
Sales (@ 33 per unit)
49,005
Less: Cost of Goods Sold
Opening Inventory
-
Add: Cost of goods Manufactured
(1700 Units * $15.2)
25,840
Less: Closing Inventory
(215 units * $15.2)
(3,268)
22,572
Gross Contribution Margin
26,433
Less: Variable Selling and Adm. Expenses
(1485 Units * $0.4)
594
Contribution Margin
25,839
Less: Fixed Cost
Fixed Manufacturing Cost
18,785
Fixed Selling and Adm. Expenses
5,500
24,285
Net Operating Income
1,554
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