Scribd Logo
Upload

Welcome to Scribd!

  • Product Costing SCM

    Uploaded by

    jeremy ground
    3 views2 pages
    The document compares absorption costing and variable costing methods under three scenarios: when production equals sales, when production is greater than sales, and when production is less than sales. It shows the income statement calculations for each method in each scenario and reconciles the differences in net income between the two methods.

    Original Description:

    Original Title

    Product-Costing-SCM

    Copyright

    © © All Rights Reserved

    Available Formats

    XLSX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    The document compares absorption costing and variable costing methods under three scenarios: when production equals sales, when production is greater than sales, and when production is less than sales. It shows the income statement calculations for each method in each scenario and reconciles the differences in net income between the two methods.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    3 views2 pages

    Product Costing SCM

    Uploaded by

    jeremy ground
    The document compares absorption costing and variable costing methods under three scenarios: when production equals sales, when production is greater than sales, and when production is less than sales. It shows the income statement calculations for each method in each scenario and reconciles the differences in net income between the two methods.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 2

    1) Production = Sales

    Absorption Costing Variable Costing


    Sales ₱ 1,500,000 Sales
    Less: COGS Less: Variable costs
    Variable production cost ₱ 500,000 Variable production cost
    Fixed OH 200000 700000 Variable GSA costs
    Gross Profit 800000 Contribution Margin
    Less: OPEX Less: Fixed Costs
    Variable GSA costs 100000 Fixed OH
    Fixed GSA expenses 100000 200000 Fixed GSA expenses
    Net Income ₱ 600,000 Net Income

    2) Production > Sales


    Absorption Costing Variable Costing
    Sales ₱ 1,200,000 Sales
    Less: COGS Less: Variable costs
    Variable production cost ₱ 400,000 Variable production cost
    Fixed OH 160000 560000 Variable GSA costs
    Gross Profit 640000 Contribution Margin
    Less: OPEX Less: Fixed Costs
    Variable GSA costs 80000 Fixed OH
    Fixed GSA expenses 100000 180000 Fixed GSA expenses
    Net Income ₱ 460,000 Net Income

    Absorption costing net income ₱ 460,000 Variable costing net income


    Less: Fixed OH of ending inventory -40000 Add: Fixed OH ending inventory
    Variable costing net income ₱ 420,000 Absorption costing net income

    3) Production < Sales


    Absorption Costing Variable Costing
    Sales ₱ 1,800,000 Sales
    Less: COGS Less: Variable costs
    Variable production cost ₱ 600,000 Variable production cost
    Fixed OH 240000 840000 Variable GSA costs
    Gross Profit 960000 Contribution Margin
    Less: OPEX Less: Fixed Costs
    Variable GSA costs 120000 Fixed OH
    Fixed GSA expenses 100000 220000 Fixed GSA expenses
    Net Income ₱ 740,000 Net Income

    Absorption costing net income ₱ 740,000 Variable costing net income


    Add: Fixed OH beg. inventory 80000 Less: Fixed OH beg. inventory
    Less: Fixed OH of ending inventory -40000 Add: Fixed OH ending inventory
    Variable costing net income ₱ 780,000 Absorption costing net income
    ₱ 1,500,000

    ₱ 500,000
    100000 600000
    900000

    200000
    100000 300000
    ₱ 600,000

    ₱ 1,200,000

    ₱ 400,000
    80000 480000
    720000

    200000
    100000 300000
    ₱ 420,000

    g net income ₱ 420,000


    ending inventory 40000
    ting net income ₱ 460,000

    ₱ 1,800,000

    ₱ 600,000
    120000 720000
    1080000

    200000
    100000 300000
    ₱ 780,000

    g net income ₱ 780,000


    beg. inventory -80000
    ending inventory 40000
    ting net income ₱ 740,000

    You might also like