ok t int ences Whitman Company has just completed its first year of operations. The company's absorption costing income statement for the year follows: Whitman Company Income Statement. Sales (42,000 units x $44.60 per unit) Cost of goods sold (42,000 units x $26 per unit) Gross margin Selling and administrative expenses Net operating income. $ 1,873,200 1,092,000 781,200 525,000 $ 256,200 The company's selling and administrative expenses consist of $315,000 per year in fixed expenses and $5 per unit sold in variable expenses. The $26 unit product cost given above is computed as follows: Direct materials. Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($318,000+ 53,000 units) Absorption costing unit product cost $12 4 4 6 $26 Required: 1. Redo the company's income statement in the contribution format using variable costing. 2. Reconcile any difference between the net operating income on your variable costing income statement and the net operating income on the absorption costing income statement above.

ok t int ences Whitman Company has just completed its first year of operations. The company's absorption costing income statement for the year follows: Whitman Company Income Statement. Sales (42,000 units x $44.60 per unit) Cost of goods sold (42,000 units x $26 per unit) Gross margin Selling and administrative expenses Net operating income. $ 1,873,200 1,092,000 781,200 525,000 $ 256,200 The company's selling and administrative expenses consist of $315,000 per year in fixed expenses and $5 per unit sold in variable expenses. The $26 unit product cost given above is computed as follows: Direct materials. Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($318,000+ 53,000 units) Absorption costing unit product cost $12 4 4 6 $26 Required: 1. Redo the company's income statement in the contribution format using variable costing. 2. Reconcile any difference between the net operating income on your variable costing income statement and the net operating income on the absorption costing income statement above.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter18: Pricing And Profitability Analysis

Section: Chapter Questions

Problem 3CE: Pattison Products, Inc., began operations in October and manufactured 40,000 units during the month...

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Ellerson Company provided the following information for the last calendar year: During the year, direct materials purchases amounted to 278,000, direct labor cost was 189,000, and overhead cost was 523,000. During the year, 100,000 units were completed. Required: 1. Calculate the total cost of direct materials used in production. 2. Calculate the cost of goods manufactured. Calculate the unit manufacturing cost. 3. Of the unit manufacturing cost calculated in Requirement 2, 2.70 is direct materials and 5.30 is overhead. What is the prime cost per unit? Conversion cost per unit?
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Wyandotte Company provided the following information for the last calendar year: During the year, direct materials purchases amounted to 256,900, direct labor cost was 176,000, and overhead cost was 308,400. There were 40,000 units produced. Required: 1. Calculate the total cost of direct materials used in production. 2. Calculate the cost of goods manufactured. Calculate the unit manufacturing cost. 3. Of the unit manufacturing cost calculated in Requirement 2, 6.62 is direct materials and 7.71 is overhead. What is the prime cost per unit? Conversion cost per unit?
Orinder Company provided the following information for the last calendar year: During the year, direct materials purchases amounted to 275,800, direct labor cost was 153,000, and overhead cost was 267,300. There were 25,000 units produced. Unit manufacturing cost (rounded to the nearest cent) is a. 28.40 b. 27.98 c. 34.95 d. 27.55
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