Maurice Tutor

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  • MCS,PHD
    Argosy University/ Phoniex University/
    Nov-2005 - Oct-2011

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  • Professor
    Phoniex University
    Oct-2001 - Nov-2016

Category > Accounting Posted 24 Jul 2017 My Price 109.00

Bird’s Eye

(Absorption and variable costing) Bird’s Eye View manufactures satellite dishes used in residential and commercial installations for satellite-broadcasted television. For each unit, the following costs apply: $50 for direct material, $100 for direct labor, and $60 for variable overhead. The company’s annual fixed overhead cost is $750,000; it uses expected capacity of 12,500 units produced as the basis for applying fixed overhead to products. A commission of 10 percent of the selling price is paid on each unit sold. Annual fixed selling and administrative expenses are $180,000. The following additional information is available:

 

2010

2011

Selling price per unit

$ 500

$ 500

Number of units sold

10,000

12,000

Number of units produced

12,500

11,000

Beginning inventory (units)

7,500

10,000

Ending inventory (units)

10,000

?

Prepare pre-tax income statements under absorption and variable costing for the years ended 2010 and 2011, with any volume variance being charged to Cost of Goods Sold. Reconcile the differences in income for the two methods.

Answers

Maurice Tutor
(5)
Status NEW Posted 24 Jul 2017 12:07 AM My Price 109.00

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