Accounting Topic #3

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P05-18

Student Name:
Class:
Problem 05-18
1.
Computation of unit product cost under variable costing:
Direct materials
Direct labor
Variable manufacturing overhead
Variable costing unit product cost
0
DENTON COMPANY
Variable Costing Income Statement
Year 1 Year 2
Unit Sales
Sales
Variable expenses:
Variable cost of goods sold
Variable selling and administrative expense
Total variable expenses
Contribution margin
Fixed expenses:
Fixed manufacturing overhead
Fixed selling and administrative expenses
Total fixed expenses
Net operating income (loss)
0 0
2.
Reconciliation of absorption and variable costing:
Variable costing net operating income
Add (deduct): Fixed manufacturing overhead
deferred in (released from) inventory
under absorption costing
Absorption costing net operating income
0 0
Enter the appropriate data in the yellow cells. Your answer for "Net operating loss" will be verified.
Enter the appropriate data in the yellow cells. Your answer for "Absorption costing net operating income" will be verified.

Given P05-18

Given Data P05-18:
DENTON COMPANY
Income Statement
Year 1 Year 2
Sales ($50 per unit) $ 1,000,000 $ 1,500,000
Cost of goods sold ($34 per unit) 680,000 1,020,000
Gross margin 320,000 480,000
Selling and administrative expenses* 310,000 340,000
Net operating income $ 10,000 $ 140,000
* Selling and administrative expenses:
Per unit variable cost $ 3.00
Fixed cost each year $ 250,000
Calculation of unit product cost:
Direct materials $ 8
Direct labor 10
Variable manufacturing overhead 2
Fixed manufacturing overhead ($350,000/25,000 units) 14
Absorption costing unit product cost $ 34
Production & sales: Year 1 Year 2
Units produced 25,000 25,000
Units sold 20,000 30,000

P5-19

Student Name:
Class:
Problem 05-19
1.
RESTON COMPANY
Segmented Income Statement
Sales Territory
Total Company Central Eastern
Sales
Variable expenses
Contribution margin
Traceable fixed expenses
Territorial segment margin
Common fixed expenses 0 0 0 0
Net operating income
0 0
Product Line
Central Territory Awls Pows
Sales
Variable expenses
Contribution margin
Traceable fixed expenses
Product line segment margin
Common fixed expenses 0 0 0 0
Sales territory segment margin
0 0
Enter appropriate data in yellow cells. Your final answers for each column will be verified.
Enter appropriate data in yellow cells. Your final answers for each column will be verified.

Given P5-19

Given Data P05-19:
RESTON COMPANY
Income Statement
For the Month Ended May 31
Sales $ 900,000 100.0%
Variable expenses 408,000 45.3%
Contribution margin 492,000 54.7%
Fixed expenses 465,000 51.7%
Net operating income $ 27,000 3.0%
Additional data:
Central Territory sales $ 400,000
Central Territory variable expenses $ 208,000
Central Territory fixed expenses $ 160,000
Eastern Territory fixed expenses $ 130,000
Central territory:
Awls sales $ 100,000
Pows sales $ 300,000
Awls variable expenses 25% of selling price
Pows variable expenses 61% of selling price
Awls fixed expenses, Central Territory $ 60,000
Pows fixed expenses, Central Territory $ 54,000

P05-20

Student Name:
Class:
Problem 05-20
1.
ADVANCE PRODUCTS, INC.
Unit Product Cost
Absorption Variable
Costing Costing
Direct materials
Variable manufacturing overhead
Fixed manufacturing overhead
Unit product cost
0 0
2.
ADVANCE PRODUCTS, INC.
Absorption Costing Income Statement
Sales
Cost of goods sold
Gross margin
Selling and administrative expenses*
Net operating income
0
* Variable
Fixed
Total
3.
ADVANCE PRODUCTS, INC.
Variable Costing Income Statement
Sales
Variable expenses:
Variable cost of goods sold
Variable selling and administrative expense
Contribution margin
Fixed expenses:
Fixed manufacturing overhead
Fixed selling and administrative expenses
Net operating loss
0
5.
Reconciliation:
Variable costing net operating loss
Add: Fixed overhead cost deferred in
inventory under absorption costing
Absorption costing net operating income
0
Enter the appropriate data in the yellow cells. Your answers for "Unit product cost" will be verified.
Enter the appropriate data in the yellow cells. Your answer for "Net operating income" will be verified.
Enter the appropriate data in the yellow cells. Your answer for "Net operating loss" will be verified.
Enter the appropriate data in the yellow cells. Your answer for "Absorption costing net operating income" will be verified.
This number is picked up from the calculation below.

Given P05-20

Given Data P05-20:
ADVANCE PRODUCTS, INC.
Manufacturing costs:
Variable costs per unit:
Direct materials $ 86
Variable manufacturing overhead $ 4
Fixed manufacturing overhead costs per mo. $ 240,000
Selling and administrative costs:
Variable (percentage of sales) 15%
Fixed per month $ 160,000
Activity:
Units produced 4,000
Units sold 3,200
Selling price per unit $ 250

P05-25

Student Name:
Class:
Problem 05-25
MEMOTEC, INC.
Income Statement
1.
Year 1 Year 2 Year 3
Unit Sales
Sales
Variable expenses:
Variable cost of goods sold
Variable selling and administrative
Total variable expenses
Contribution margin
Fixed expenses:
Fixed manufacturing overhead
Fixed selling and administrative
Total fixed expenses
Net operating income (loss)
0 0 0
2a.
MEMOTEC, INC.
Computations
Unit product cost: Year 1 Year 2 Year 3
Variable manufacturing cost
Fixed manufacturing cost
Absorption costing unit product cost
0 0 0
2b.
Reconciliations:
Variable costing net operating income (loss)
Add (Deduct): Fixed manufacturing overhead
cost deferred in inventory from Year 2 to
Year 3 under absorption costing
Add: Fixed manufacturing overhead cost
deferred in inventory from Year 3 to the
future under absorption costing
Absorption costing net operating income (loss)
0 0 0
5b.
Year 1 Year 2 Year 3
Unit Sales
Sales
Cost of goods sold:
Cost of goods manufactured
Add underapplied overhead
Cost of goods sold
Gross margin
Selling and administrative expenses
Net operating income (loss)
0 0 0
Enter the appropriate data in the yellow cells. Your answers for "Unit product cost" will be verified.
Enter the appropriate data in the yellow cells. Your answers for "Absorption costing net operating income" will be verified.
Enter the appropriate data in the yellow cells. Your answers for "Net operating income (loss)" will be verified.
Enter the appropriate data in the yellow cells. Your answers for "Net operating income (loss)" will be verified.

Given P05-25

Given Data P05-25:
MEMOTEC, INC.
Income Statement
Year 1 Year 2 Year 3
Sales $ 1,000,000 $ 800,000 $ 1,000,000
Cost of goods sold 800,000 560,000 850,000
Gross margin 200,000 240,000 150,000
Selling and administrative costs 170,000 150,000 170,000
Net operating income (loss) $ 30,000 $ 90,000 $ (20,000)
Production & sales:
Year 1 Year 2 Year 3
Production in units 50,000 60,000 40,000
Sales in units 50,000 40,000 50,000
Year 2:
Drop in sales 20%
Expected sales (units) 50,000
Production set for expected sales and buffer (units) 60,000
Additional Information:
Variable manufacturing overhead costs per unit $ 4
Fixed manufacturing overhead costs per year $ 600,000
Variable selling and administrative expenses per unit $ 2
Fixed selling and administrative expenses per year $ 70,000