Nama : Irga Ayudias Tantri

NIM : 12030121410011

Case 8–42
Lehighton Chalk Company manufactures sidewalk chalk, which it sells online by the box at $50
per unit. Lehighton uses an actual costing system, which means that the actual costs of direct
material, direct labor, and manufacturing overhead are entered into work-in-process inventory.
The actual application rate for manufacturing overhead is computed each year; actual
manufacturing overhead is divided by actual production (in units) to compute the application
rate. Information for Lehighton’s first two years of operation is as follows:

Required:
Lehighton Chalk Company had no beginning or ending work-in-process inventories for either
year.
1. Prepare operating income statements for both years based on absorption costing.
2. Prepare operating income statements for both years based on variable costing.
3. Prepare a numerical reconciliation of the difference in income reported under the two
costing methods used in requirements 1 and 2.

Case 8–43
Refer to the information given in the preceding case for Lehighton Chalk Company
Required:
1. Reconcile Lehighton’s operating income reported under absorption and variable costing,
during each year, by comparing the following two amounts on each income statement:
 Cost of goods sold
 Fixed cost (expensed as a period expense)
 2. What was Lehighton’s total operating income across both years under absorption costing
and under variable costing?
3. What was the total sales revenue across both years under absorption costing and under
variable costing?
4. What was the total of all costs expensed on the operating income statements across both
years under absorption costing and under variable costing?
5. Subtract the total costs expensed across both years (requirement 4) from the total sales
revenue across both years (requirement 3): (a) under absorption costing and (b) under
variable costing.
6. Comment on the results obtained in requirements 1, 2, 3, and 4 in light of the following
assertion: Timing is the key in distinguishing between absorption and variable costing
Jawaban :
1.