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Ques 1-b,c
Sales 1122000
Cost of goods sold 732105
Gross Margin 389895
Selling and administrative expenses
variable (28050*6.90) 193545
fixed 173850 367395
Net income as per absorption costing 22500
Ques 3-reconciliation
Variable costing net operating income/(loss) $ (22,500.00)
Add:fixed manufacturing overhead cost deferred $ 45,000.00
(33050-28050)*9
Absorption costing net operating income/(loss) $ 22,500.00
Ques 3
Tami’s Creations, Inc.
Income Statement
For the Quarter Ended March 31
Sales (38,050 units)*$50 $ 1,522,000
Variable expenses:
Variable cost of goods sold(38050*17.10) $ 650,655
Variable selling and administrative(38050*6.90) $ 262,545 $ 913,200
Contribution margin $ 608,800
Fixed expenses:
Fixed manufacturing overhead $ 297,450
Fixed selling and administrative $ 173,850 $ 471,300
Net operating income as per variable costing $ 137,500
note:
1122000/28050=40
under absorption costing in 2nd quarter unit costs remain same
7.5+8+1.6=17.1
1-a.
Absorption costing unit product cost is:
Direct materials $ 7.30
Direct labor $ 5.90
Variable manufacturing overhead $ 1.80
fixed manufacturing overhead (272310/31300) $ 8.70
Absorption costing unit product cost $ 23.70
Ques 2
Sales 1132000
Cost of goods sold 670710
Gross Margin 461290
Selling and administrative expenses
variable (23000*7.85) 191025
fixed 257215 448240
Net income as per absorption costing 13050
Ques 3-reconciliation
Variable costing net operating income/(loss) $ (13,050.00)
Add:fixed manufacturing overhead cost deferred $ 26,100.00
(31300-28300)*8.7
Absorption costing net operating income/(loss) $ 13,050.00
Ques 4
Tami’s Creations, Inc.
Income Statement
For the Quarter Ended March 31
Sales (34,300 units)*$40 $ 1,372,000
Variable expenses:
Variable cost of goods sold(34300*15) $ 514,500
Variable selling and administrative(34300*6.75) $ 231,525 $ 746,025
Contribution margin $ 625,975
Fixed expenses:
Fixed manufacturing overhead $ 272,310
Fixed selling and administrative $ 257,215 $ 529,525
Net operating income as per variable costing $ 96,450
note:
1132000/28300=40
under absorption costing in 2nd quarter unit costs remain same
7.3+5.9+1.8=15
Sales 28300 1132000 40
variable expenses
COGS 424500
Selling 191025 615525
contribution 516475
fixed expenses
Fixed mfr OH 272310
Fixed selling OH 257215 529525
NOI -13050
VC cost
dm 7.3
dl 5.9
voh 1.8
vsoh 6.75
1-a.
Absorption costing unit product cost is:
Direct materials $ 7.20
Direct labor $ 2.90
Variable manufacturing overhead $ 1.70
fixed manufacturing overhead (213200/26000) $ 8.20
Absorption costing unit product cost $ 20.00
Ques 2
Sales
Cost of goods sold
Gross Margin
Selling and administrative expenses
variable (23000*7.85) 180550
fixed 219000
Net income as per absorption costing
Ques 3-reconciliation
Variable costing net operating income/(loss) $ (49,250.00)
Add:fixed manufacturing overhead cost deferred $ 24,600.00
(26000-23000)*8.2
Absorption costing net operating income/(loss) $ (24,650.00)
Ques 4
Tami’s Creations, Inc.
Income Statement
For the Quarter Ended March 31
Sales (29,000 units)*$36.30
Variable expenses:
Variable cost of goods sold(29000*11.80) $ 342,200
Variable selling and administrative(29000*7.85) $ 227,650
Contribution margin
Fixed expenses:
Fixed manufacturing overhead $ 213,200
Fixed selling and administrative $ 219,000
Net operating income as per variable costing
Sales
Cost of goods sold(29000*20)
Gross Margin
Selling and administrative expenses
variable $ 227,650
fixed $ 219,000
Net income as per absorption costing
note:
834900/23000=$36.30
under absorption costing in 2nd quarter unit costs remain same
7.2+2.90+1.70=11.80
Sales 23000 834900 36.3
variable expenses
COGS 271400
Selling 180550 451950
contribution 382950
fixed expenses
Fixed mfr 213200
Fixed selli 219000 432200
NOI -49250
399550 dm 7.2
-24650 dl 2.9
voh 1.7
vsoh 7.85
$ 1,052,700
$ 569,850
$ 482,850
$ 432,200
$ 50,650
1052700
580000
472700
$ 446,650
$ 26,050
1-a.
Absorption costing unit product cost is:
Direct materials 7.5
Direct labor 7.2
Variable manufacturing overhead 1.8
Fixed manufacturing overhead ($319,680 / 33,300 units) 9.6
Absorption costing unit product cost 26.1
Ques 2
Sales 1132000
Cost of goods sold(28300*26.10) 738630
Gross Margin 393370
Selling and administrative expenses 369370
(6.95*28300+172685)
Net income as per absorption costing 24000
Ques 3-reconciliation
Variable costing net operating income/(loss) -24000
Add:fixed manufacturing overhead cost deferred 48000
(33300-28300)*$9.6
Absorption costing net operating income/(loss) 24000
Ques 4
Tami’s Creations, Inc.
Income Statement
For the Quarter Ended March 31
Sales (38,300 units)*$40 1532000
Variable expenses:
Variable cost of goods sold(38300*16.5) 631950
Variable selling and administrative(38300*6.95) 266185
Contribution margin 633865
Fixed expenses:
Fixed manufacturing overhead 319680
Fixed selling and administrative 172685
Net operating lincome 141500
Sales 1532000
Cost of goods sold(38300*26.10) 999630
Gross Margin 532370
Selling and administrative expenses 438870
(6.95*38300+172685)
Net income as per absorption costing 93500
Variable costing net operating income/(loss) 141500
note:
1132000/28300=$40
under absorption costing in 2nd quarter unit costs remain same
7.5+7.2+1.8=16.50