Submitted by: Submitted by tt8mich
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Category: Business and Industry
Date Submitted: 09/20/2011 01:47 PM
Text Exercises
12-59 see spreadsheet
13-B3 Comparison of Variable Costing and Absorption Costing
1. What is the ending finished-goods inventory cost under absorption costing?
Direct labor $4,200
Direct materials used 3,500
Fixed manufacturing overhead 2,200
Variable manufacturing overhead 300
Total Manufacturing cost 10,200
Cost per unit=10,200/1,600=$6.38 Units produced 1600 – Units sold 1400=200Units
200 units * $6.38= $12.76
2. What is the ending finished-goods inventory cost under variable costing?
Direct labor $4,200
Direct materials used 3,500
Variable manufacturing overhead 300
Total Manufacturing cost $8,000
Cost per unit=8000/1600=$5.00 1600-1400=200 units
200*$5.00=$1,000.00
13-45 Variable and Absorption Costing
1. Determine operating income for 20X7, assuming the firm uses the variable-costing approach to product costing.
Cost Per Unit = Total Cost incurred $144,000 / Units Manufactured 15,000 = $9.60
Units Manu 15,000 – Units Sold 12,000 = 3000 Units
Ending Inventory cost = Cost per unit $9.6 x 3000 Units = $28,800
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; and (b) operating income for the year ended December 31, 20X7.
Cost Per Unit = Total Cost incurred $225,000 / Units Manufactured 15,000 = $15
15,000 – Units Sold 12,000 = 3000 Units
Ending Inventory cost = Cost per unit $15 x 3000 Units = $45,000
13-48 Overhead Variances
a. F Fixed=$2600 Variable=$2300
b. F Fixed=$1700 Variable=$2300
c. F Fixed=$1700 Variable=$1900
d. F Fixed=$1700 Variable=$2300
13-49 Variances
1. Spending variance F
2. Efficiency variance F
3. Production-volume variance U
4. Flexible-budget variance U
5. Under applied overhead U