3. Osawa, Inc.planned and actually produced 200,000 units of product in 2012, itsfirst year of operations. Variable manufacturing cost were $30 perunit. Planned and actual fixed manufacturing costs were $600,000and selling and administrative expenses were $400,000. Osawa sold120,000 units of product for $40 per unit.What is Osawa%u2019s net income according to GAAP?
What is Osawa%u2019s net income using variable costing?
Explain the difference, if any, in net income?
3. Osawa, Inc.planned and actually produced 200,000 units of product in 2012, itsfirst year of operations. Variable manufacturing cost were $30 perunit. Planned and actual fixed manufacturing costs were $600,000and selling and administrative expenses were $400,000. Osawa sold120,000 units of product for $40 per unit. What is Osawa%u2019s net income according to GAAP? What is Osawa%u2019s net income using variable costing? Explain the difference, if any, in net income? |
Related questions
Bracey Company manufactures and sells one product. The followinginformation pertains to the companyâs first year of operations:
| Variable cost per unit: | ||
| Direct materials | $ | 31 |
| Fixed costs per year: | ||
| Direct labor | $ | 429,000 |
| Fixed manufacturing overhead | $ | 421,200 |
| Fixed selling and administrative expenses | $ | 72,000 |
The company does not incur any variable manufacturing overheadcosts or variable selling and administrative expenses. During itsfirst year of operations, Bracey produced 26,000 units and sold23,900 units. The selling price of the companyâs product is $70 perunit.
Required:
1. Assume the company uses super-variable costing:
a. Compute the unit product cost for the year.
b. Prepare an income statement for the year.
2. Assume the company uses a variable costing system thatassigns $16.50 of direct labor cost to each unit produced:
a. Compute the unit product cost for the year.
b. Prepare an income statement for the year.
3. Assume the company uses an absorption costing system thatassigns $16.50 of direct labor cost and $16.20 of fixedmanufacturing overhead cost to each unit produced:
a. Compute the unit product cost for the year.
b. Prepare an income statement for the year.
4a. Reconcile the difference between the super-variable costingand variable costing net operating incomes.
4b. Reconcile the difference between the super-variable costingand absorption costing net operating incomes.
