nger Company produces only one product and sells that product for $110 per unit. Cost information for the product is as follows: ect Material $14 per Unit ect Labor $26 per Unit riable Overhead $5 per Unit ked Overhead $33,500 lling expenses are $4 per unit and are all variable. Administrative expenses of $20,000 are all fixed. Grainger produced 5,000 units; sold 4,000; and had no beginning inventory. Compute net income under Absorption Costing Variable Costing 3. Which costing method provide higher net income? By how much? method provided more net income by $ The

nger Company produces only one product and sells that product for $110 per unit. Cost information for the product is as follows: ect Material $14 per Unit ect Labor $26 per Unit riable Overhead $5 per Unit ked Overhead $33,500 lling expenses are $4 per unit and are all variable. Administrative expenses of $20,000 are all fixed. Grainger produced 5,000 units; sold 4,000; and had no beginning inventory. Compute net income under Absorption Costing Variable Costing 3. Which costing method provide higher net income? By how much? method provided more net income by $ The

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 25E: Last year, Orsen Company produced 25,000 juicers and sold 26,500 juicers for 60 each. The actual...

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Last year, Orsen Company produced 25,000 juicers and sold 26,500 juicers for 60 each. The actual variable unit cost is as follows: Fixed overhead was 320,000. Fixed selling expenses consisted of advertising copayments totaling 110,000. Fixed administrative expenses were 236,000. There were no beginning and ending work-in-process inventories. Beginning finished goods inventory was 148,000 for 4,000 juicers. The value of ending inventory reported on the financial statements was a. 55,500 b. 92,500 c. 66,500 d. 39,900
Grainger Company produces only one product and sells that product for $110 per unit. Cost information for the product is as follows: Direct Material $16 per Unit Direct Labor $26 per Unit Variable Overhead $6 per Unit Fixed Overhead $27,200 Selling expenses are $5 per unit and are all variable. Administrative expenses of $20,000 are all fixed. Grainger produced 4,000 units; sold 3,200; and had no beginning inventory. A. Compute net income under i. Absorption Costing $fill in the blank 1 ii. Variable Costing $fill in the blank 2 B. Which costing method provide higher net income? By how much? The method provided more net income by $fill in the blank 4 .
Grainger Company produces only one product and sells that product for $90 per unit. Cost information for the product is as follows: Direct Material $16 per Unit Direct Labor $26 per Unit Variable Overhead $4 per Unit Fixed Overhead $27,200 Selling expenses are $5 per unit and are all variable. Administrative expenses of $20,000 are all fixed. Grainger produced 4,000 units; sold 3,200; and had no beginning inventory. A. Compute net income under i. Absorption Costing $ ii. Variable Costing B. Which costing method provide higher net income? By how much? The method provided more net income by $
Grainger Company produces only one product and sells that product for $110 per unit. Cost information for the product is as follows: Direct Material $16 per Unit Direct Labor $24 per Unit Variable Overhead $5 per Unit Fixed Overhead $40,200 Selling expenses are $4 per unit and are all variable. Administrative expenses of $24,000 are all fixed. Grainger produced 6,000 units; sold 4,800; and had no beginning inventory. A. Compute net income under i. Absorption Costing $ ii. Variable Costing $
Grainger Company produces only one product and sells that product for $90 per unit. Cost information for the product is as follows: Direct Material $16 per Unit Direct Labor $26 per Unit Variable Overhead $5 per Unit Fixed Overhead $26,800 Selling expenses are $4 per unit and are all variable. Administrative expenses of $16,000 are all fixed. Grainger produced 4,000 units; sold 3,200; and had no beginning inventory. A. Compute net income under i. Absorption Costing $ ii. Variable Costing B. Which costing method provide higher net income? By how much? The absorption costing ✔method provided more net income by $
Grainger Company produces only one product and sells that product for $110 per unit. Cost information for the product is as follows: Direct Material $14 per Unit Direct Labor $24 per Unit Variable Overhead $4 per Unit Fixed Overhead $40,200 Selling expenses are $4 per unit and are all variable. Administrative expenses of $24,000 are all fixed. Grainger produced 6,000 units; sold 4,800; and had no beginning inventory. A. Compute net income under 1. Absorption Costing i Variable Costing B. Which costing method provide higher net income? By how much? The absorption costing ✔method provided more net income by Check My Work A. Remember that absorption costing includes all costs necessary for production. Conversely, variable costing only uses the variable costs that relate directly to the production process. Keep this in mind when calculating net income under each assumption. B. Depending on the cost method chosen, there will be differences due to the way fixed costs are treated under each…
Grainger Company produces only one product and sells that product for $100 per unit. Cost information for the product is: Direct Material $15 per UnitDirect Labor $25 per UnitVariable Overhead $5 per UnitFixed Overhead $34,000 Selling expenses are $4 per unit and are all variable. Administrative expenses of $20,000 are all fixed. Grainger produced 5,000 units, sold 4,000, and had no beginning inventory. Calculate the Net Income using the Variable Method. Note: how your work!
Grainger Company produces only one product and sells that product for $100 per unit. Cost information for the product is: Direct Material $15 per UnitDirect Labor $25 per UnitVariable Overhead $5 per UnitFixed Overhead $34,000 Selling expenses are $4 per unit and are all variable. Administrative expenses of $20,000 are all fixed. Grainger produced 5,000 units, sold 4,000, and had no beginning inventory. Calculate the Net Income using the Absorption Method. Note: how your work!
Grainger Company produces only one product and sells that product for $90 per unit. Cost information for the product is as follows: Direct Material $14 per Unit Direct Labor $26 per Unit Variable Overhead $6 per Unit Fixed Overhead $33,500 Selling expenses are $4 per unit and are all variable. Administrative expenses of $20,000 are all fixed. Grainger produced 5,000 units; sold 4,000; and had no beginning inventory. A. Compute net income under i. Absorption Costing $fill in the blank 1 ii. Variable Costing $fill in the blank 2 B. Which costing method provide higher net income? By how much? The absorption costing method provided more net income by $fill in the blank 4 .
Camile Company has no beginning and ending inventories, and reports the following data about its only product: Direct materials used $100,000 Direct labor $80,000 Fixed indirect manufacturing $50,000 Fixed selling and administrative $220,000 Variable indirect manufacturing $20,000 Variable selling and administrative $75,000 Selling price(per unit) $84 Units produced and sold 10,000 Camile Company uses the absorption approach to prepare the income statement. What is the product cost per unit? A) $20 B) $25 C) $27.50 D) $32.50
Silver Corporation produces a single product. During the current year, Silver produced 30,000 units and sold 24,000 units. There were no units in beginning inventory. Silver's total variable manufacturing costs were $75,000 and its total fixed manufacturing overhead costs were $45,000. Which of the following statements is true? O Under variable costing, the cost of the items in ending inventory is $4.00 per unit. O Operating income computed using absorption costing is $9,000 lower than operating income computed using variable costing. O Under absorption costing, the cost of the items in ending inventory is $2.50 per unit. O Ending inventory computed using variable costing is $9,000 lower than ending inventory computed using absorption costing. O None of the above statements is true.
Sierra Company incurs the following costs to produce and sell its only product. Variable costs per unit: Direct materials $ 9 Direct labor $ 8 Variable manufacturing overhead $ 3 Variable selling and administrative expenses $ 4 Fixed costs per year: Fixed manufacturing overhead $ 60,000 Fixed selling and administrative expenses $ 305,000 During this year, 30,000 units were produced and 25,250 units were sold. The Finished Goods inventory account at the end of this year shows a balance of $95,000 for the 4,750 unsold units. Required: 1-a. Calculate this year's ending balance in Finished Goods inventory two ways—using variable costing and using absorption costing. 1-b. Does it appear that the company is using variable costing or absorption costing to assign costs to the 4,750 units in its Finished Goods inventory? 2. Assume that the company wishes to prepare this year's financial statements for its stockholders. a. Is Finished Goods inventory…