During the most recent year, Osterman Company had the following data: 1. Calcula
ID: 2610680 • Letter: D
Question
During the most recent year, Osterman Company had the following data:
1. Calculate the cost of goods sold under variable costing.
The cost of goods sold under the variable costing method is .
2. Prepare an income statement using variable costing. Refer to the list of Labels and Amount Descriptions for the exact wording of text items within your income statement.
Osterman Company
Variable-Costing Income Statement
For the Most Recent Year
1
2
3
4
5
6
7
1. Calculate the cost of goods sold under absorption costing.
The cost of goods sold under the absorption costing method is .
2. Prepare an income statement using absorption costing. Refer to the list of Amount Descriptions for the exact wording of text items within your income statement.
Osterman Company
Absorption-Costing Income Statement
For the Most Recent Year
1
2
3
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5
Units in beginning inventory --- Units produced 11,350 Units sold ($50 per unit) 9,400 Variable costs per unit: Direct materials $10 Direct labor $5 Variable overhead $3 Fixed costs: Fixed overhead per unit produced $4 Fixed selling and administrative expenses $138,500Explanation / Answer
Computation of Cost of Goods Sold for 9400 Unit Using Variable costing Using Absorption costing Cost/unit toal Cost Cost/unit toal Cost Variable cost for 9400 unit Direct Material $10 $94,000 $10 $94,000 Direct labour $5 $47,000 $5 $47,000 Variable Overhead $3 $28,200 $3 $28,200 Fixed Cost Fixed ovehead - $4 $37,600 Total cost of goods sold $169,200 $206,800 Income statement Using Variable costing Using Absorption costing toal Cost Amount Sales ( 9400 unit@$50) 470000 470000 Less: Cost of goods sold $169,200 $206,800 Contribution marging $300,800 $263,200 Less: Fixed Overhead $37,600 $0 Gross Margin $263,200 $263,200 Less: Selling & adminstration Expenses $138,500 $138,500 Operating Income $124,700 $124,700
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