*please type out the answer.
The Hampton Company produces and sells a single product. Thefollowing data refer to the year just completed.
Selling price
$450
Units in beginning inventory
0
Units produced
25,000
Units sold
22,000
Variable costs per unit:
Direct materials
$150
Direct labor
$75
Variable manufacturing overhead
$25
Variable selling and admin
$15
Fixed costs:
Fixed manufacturing overhead
$275,000
Fixed selling and admin
$200,000
Required:
Compute the cost of a single unit of product under both theabsorption costing and variable costing approaches.
Prepare an income statement for the year using absorptioncosting.
Prepare an income statement for the year using variablecosting.
*please type out the answer.
The Hampton Company produces and sells a single product. Thefollowing data refer to the year just completed.
Selling price | $450 |
Units in beginning inventory | 0 |
Units produced | 25,000 |
Units sold | 22,000 |
Variable costs per unit: | |
Direct materials | $150 |
Direct labor | $75 |
Variable manufacturing overhead | $25 |
Variable selling and admin | $15 |
Fixed costs: | |
Fixed manufacturing overhead | $275,000 |
Fixed selling and admin | $200,000 |
Required:
Compute the cost of a single unit of product under both theabsorption costing and variable costing approaches.
Prepare an income statement for the year using absorptioncosting.
Prepare an income statement for the year using variablecosting.
Related questions
The Dorset Corporation produces and sells a single product. Thefollowing data refer to the year just completed:
| Beginning inventory | 0 | |
| Units produced | 29,500 | |
| Units sold | 20,400 | |
| Selling price per unit | $ | 469 |
| Selling and administrativeexpenses: | ||
| Variable per unit | $ | 19 |
| Fixed per year | $ | 346,800 |
| Manufacturing costs: | ||
| Direct materials cost perunit | $ | 203 |
| Direct labor cost per unit | $ | 50 |
| Variable manufacturing overheadcost per unit | $ | 30 |
| Fixed manufacturing overhead peryear | $ | 442,500 |
Assume that direct labor is a variable cost.
Required:
a. Compute the unit product cost under both the absorptioncosting and variable costing approaches.
b. Prepare an income statement for the year using absorptioncosting.
c. Prepare an income statement for the year using variablecosting.
d. Reconcile the absorption costing and variable costing netoperating income figures in (b) and (c) above.
Lincoln Company, which has only one product, has provided thefollowing data concerning its most recent month of operations.
Selling price | $125 |
Units in beginning inventory | 600 |
Units produced | 3,000 |
Units sold | 3,500 |
Units in ending inventory | 100 |
Variable costs per unit: | |
Direct materials | $27 |
Direct labor | $18 |
Variable manufacturing overhead | $10 |
Variable selling and admin | $12 |
Fixed costs: | |
Fixed manufacturing overhead | $75,000 |
Fixed selling and admin | $30,000 |
Required:
What is the unit product cost for the month under variablecosting?
What is the unit product cost for the month under absorptioncosting?
Prepare an income statement for the month using the variablecosting method.
Prepare an income statement for the month using the absorptioncosting method.
Please show work for credit
The Dorset Corporation produces and sells a single product. The following data refer to the year just completed:
| Beginning inventory | 0 | |
| Units produced | 34,000 | |
| Units sold | 25,900 | |
| Selling price per unit | $ | 482 |
| Selling and administrative expenses: | ||
| Variable per unit | $ | 16 |
| Fixed per year | $ | 362,600 |
| Manufacturing costs: | ||
| Direct materials cost per unit | $ | 240 |
| Direct labor cost per unit | $ | 56 |
| Variable manufacturing overhead cost per unit | $ | 34 |
| Fixed manufacturing overhead per year | $ | 578,000 |
Assume that direct labor is a variable cost.
Required:
a. Compute the unit product cost under both the absorption costing and variable costing approaches.
b. Prepare an income statement for the year using absorption costing.
c. Prepare an income statement for the year using variable costing.
d. Reconcile the absorption costing and variable costing net operating income figures in (b) and (c) above.
