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  • WMSU Company unit product cost and income statement

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    chelsea kayle licomes fuentes
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    This document contains cost information for two companies, WMSU Company and Super Bicycle. For WMSU Company, it provides variable costs per unit for direct materials, direct labor, variable manufacturing overhead, and variable selling and administrative costs, as well as total fixed costs for manufacturing overhead and selling and administrative costs. It also provides information on units produced and sold. For Super Bicycle, it similarly provides variable costs per unit and total fixed costs, as well as information on units in beginning inventory, units produced, units sold, and units in ending inventory. The document asks to calculate unit product costs and prepare income statements for both companies under absorption and variable costing assumptions.

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    Original Title

    CA_A3_F

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    This document contains cost information for two companies, WMSU Company and Super Bicycle. For WMSU Company, it provides variable costs per unit for direct materials, direct labor, variable manufacturing overhead, and variable selling and administrative costs, as well as total fixed costs for manufacturing overhead and selling and administrative costs. It also provides information on units produced and sold. For Super Bicycle, it similarly provides variable costs per unit and total fixed costs, as well as information on units in beginning inventory, units produced, units sold, and units in ending inventory. The document asks to calculate unit product costs and prepare income statements for both companies under absorption and variable costing assumptions.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    59 views1 page

    WMSU Company unit product cost and income statement

    Uploaded by

    chelsea kayle licomes fuentes
    This document contains cost information for two companies, WMSU Company and Super Bicycle. For WMSU Company, it provides variable costs per unit for direct materials, direct labor, variable manufacturing overhead, and variable selling and administrative costs, as well as total fixed costs for manufacturing overhead and selling and administrative costs. It also provides information on units produced and sold. For Super Bicycle, it similarly provides variable costs per unit and total fixed costs, as well as information on units in beginning inventory, units produced, units sold, and units in ending inventory. The document asks to calculate unit product costs and prepare income statements for both companies under absorption and variable costing assumptions.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 1

    Exercise 1

    WMSU Company manufactures and sells a single product. The following costs were incrred during the company’s first year of operations:

    Variable costs per unit:


    Production:
    Direct Materials P18
    Direct Labor 7
    Variable manufacturing overhead 2
    Variable selling and administrative 5
    Fixed costs per year:
    Fixed manufacuring overhead P160,000
    Fixed selling and administrative 110,000

    During the year, the company produced 20,000 units and sold 16,000 units. The selling price of the company’s product is P50 unit.

    Required:

    1. Assume that the company uses the absorption costing method:


    a. Compute the unit product cost
    b. Prepare an income statement for the year.
    2. Assume that the company uses the absorption costing method:
    a. Compute the unit product cost
    b. Prepare an income statement for the year.

    Exercise 2

    Super Bicycle produces an inexpensive yet rugged bicycle for P5,000. Selected data for the company’s operations last year follow:
    Units in beginning inventory 0
    Units produced 10,000
    Units sold 8,000
    Units in ending inventory 2,000

    Variable costs per unit:


    Direct Materials P1,200
    Direct Labor 1,400
    Variable manufacturing overhead 500
    Variable selling and administrative 200
    Fixed costs per year:
    Fixed manufacuring overhead P6,000,000
    Fixed selling and administrative P4,000,000

    Required:

    1. Assume that the company uses absorption costing. Compute the unit product cost for one bicycle.
    2. Assume that the company uses variable . Compute the unit product cost for one bicycle.

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