absorption and variable costing
See Ch_6_Student_Form.xls
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Under tab "Chapter 6 Form Question 1", can someone please tell me why year 2 net operating income is the same for both absorption and variable costing?
qattachments_ae5204a599b628afe2dcb584915694df49f29ff0.xls Chapter 6: Applying Excel Data Selling price per unit $50 Manufacturing costs: Variable per unit produced: Direct materials $11 Direct labor $6 Variable manufacturing overhead $3 Fixed manufacturing overhead per year $120,000 Selling and administrative expenses: Variable per unit sold $4 Fixed per year $70,000 Year 1 Year 2 Units in beginning inventory 0 Units produced during the year 10,000 6,000 Units sold during the year 8,000 8,000 Enter a formula into each of the cells marked with a ? below Review Problem 1: Contrasting Variable and Absorption Costing Compute the Ending Inventory Year 1 Year 2 Units in beginning inventory 0 2,000 Units produced during the year 10,000 6,000 Units sold during the year 8,000 8,000 Units in ending inventory 2,000 0 Compute the Absorption Costing Unit Product Cost Year 1 Year 2 Direct materials $11 $11 Direct labor $6 $6 Variable manufacturing overhead $3 $3 Fixed manufacturing overhead $12 $20 Absorption costing unit product cost $32 $40 Construct the Absorption Costing Income Statement Year 1 Year 2 Sales $400,000 $400,000 Cost of goods sold $256,000 $304,000 Gross margin $144,000 $96,000 Selling and administrative expenses $102,000 $102,000 Net operating income $42,000 -$6,000 Compute the Variable Costing Unit Product Cost Year 1 Year 2 Direct materials $11 $11 Direct labor $6 $6 Variable manufacturing overhead $3 $3 Variable costing unit product cost $20 $20 Construct the Variable Costing Income Statement Year 1 Year 2 Sales $400,000 $400,000 Variable expenses: Variable cost of goods sold $160,000 $160,000 Variable selling and administrative expenses $32,000 $192,000 $32,000 $192,000 Contribution margin $208,000 $208,000 Fixed expenses: Fixed manufacturing overhead $120,000 $120,000 Fixed selling and administrative expenses $70,000 $190,000 $70,000 $190,000 Net operating income $18,000 $18,000
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Posted 23 Dec 2017 07:12 AM
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