Sproull Inc., which produces a single product, has provided thefollowing data for its most recent month of operation: Number ofunits produced 7,700 Variable costs per unit: Direct materials $157 Direct labor $ 81 Variable manufacturing overhead $ 3 Variableselling and administrative expenses $ 9 Fixed costs: Fixedmanufacturing overhead $ 415,800 Fixed selling and administrativeexpenses $ 146,300 The company had no beginning or endinginventories.
Required:
a. Compute the unit product cost under absorption costing
b. Compute the unit product cost under variable costing.
Sproull Inc., which produces a single product, has provided thefollowing data for its most recent month of operation: Number ofunits produced 7,700 Variable costs per unit: Direct materials $157 Direct labor $ 81 Variable manufacturing overhead $ 3 Variableselling and administrative expenses $ 9 Fixed costs: Fixedmanufacturing overhead $ 415,800 Fixed selling and administrativeexpenses $ 146,300 The company had no beginning or endinginventories.
| Required: |
| a. | Compute the unit product cost under absorption costing |
| b. | Compute the unit product cost under variable costing. |
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.
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.
