Kelompok 7

Chapter 15:
Segmented Reporting
and Performance
Evaluation

Afif Khairi
Billinardo Eri Saputra
Yudha Nandatama

Variable Costing and Absorption Costing : An analysis and Comparison Variable Costing assigns only variable manufacturing costs to the product. • Direct materials • Direct labor • Variable overhead .

this adds fixed overhead to the formula.Variable Costing and Absorption Costing : An analysis and Comparison Absorption costing assigns all manufacturing costs to the product. • Direct materials • Direct labor • Variable overhead • Fixed overhead .

000 .000 $50 $100 $50 $10 $250.000 8.Inventory Valuation Units in beginning inventory Units produced Units sold ($300 each) Normal volume Variable cost per unit : Direct Materials Direct labors Variable Overhead Variable Selling & Administrative Fixed costs: Fixed overhead Fixed selling and administrative --10.000 100.000 10.

Unit Cost Variable costing Direct materials Direct labor Variable overhead Fixed overhead Total $ 50 100 50 $200 Absorption costing $ 50 100 50 25 $225 .

150.Fairchild Company Variable-Costing Income Statement Sales $2.000 Net income $ 370.400.680.000 350.600.000 Variable selling and admin.000 Contribution margin $ 720.000 1. 80.000 Less variable expenses: Variable cost of goods sold $1.000 Fixed selling and admin.000 .000 Less fixed expenses: Fixed overhead $ 250.

Fairchild Company Absorption-Costing Income Statement Sales Less: Cost of goods sold Gross margin Less: Selling and administrative exp.400.000 1.000 $ 600.800. Net income $2.000 .000 180.000 $ 420.

Production. Sales. and Income Relationships If Production > Sales Production < Sales Production = Sales Then Absorption NI > Variable NI Absorption NI < Variable NI Absorption NI = Variable NI .

50 0.. and 2004 follows: Variable cost per unit: Direct materials Direct labor Variable overhead (estimated and actual) Variable selling and administrative $4.000 units and the sales price was $10. Inc. .000 per year.00 1. for years 2002. Fixed selling and administrative expenses were $50.25 Estimated fixed overhead was $150.000 each year.Example To illustrate these relationship consider the example based on the operating Data for Belnip. Normal production was 150.50 0. 2003.

000 100.000 50.Other operating data were as follows: 2004 Beginning Inventory Production Sales Ending Inventory 150.000 50.000 200.000 - 2005 2006 150.000 - .000 150.000 150.

200) Variable selling and admin² (37.0) (600) (1.Variable-Costing Income Statements 2004 Sales 2005 2006 $1.5) (25) (50) $562.5 $175 $550 Less variable expenses: Contribution margin Less fixed expenses: Fixed overhead Fixed selling and admin Net Income .000 $2.0 $1.5 $375 $750 (150) (150) (150) (50) (50) (50) $362.000 Variable cost of goods sold¹ (900.500.

Variable-Costing Income Statements (cont) ¹Beginning Inventory Variable cost of goods manufactured Goods available for sale Less: Ending Inventory Variable costs of goods sold ²$0.25 per unit x units sold $900 $900 $900 $900 $900 $300 $600 $300 $900 $1200 $1200 .

00 $1.050.Absorption-Costing Income Statements 2004 Sales Less: Cost of goods sold¹ Gross margin Less: Selling and admin.000 (1.00) (700) (1.000 $2. Net income ¹Beginning Inventory Cost of goods manufactured Goods available for sale Less: Ending Inventory Variable costs of goods sold 2005 2006 $1.50 $ 225 $ 500 $1050 $1050 $1050 $1050 $350 $1050 $ 700 $350 $1050 $1400 $1400 .400) $ 450.00 $ 300 $ 600 87.500.50 75 100 $ 362. exp.

Absorption costing income – Variable costing income = Fixed overhead x (Units produced – Units sold) 2006 $500.000 – $550.000 = $1 x (150.000) .000 – 200.

Variable Costing and Performance Evaluation of Managers .