Homework SourseFor the coming year Paulson Computers Inc expects to produce
For the coming year, Paulson Computers Inc. expects to produce 144,000 computers. Of these, 64,000 will be consumer (personal) computers and 80,000 will be small business computers. Common fixed overhead is $1,700,700. Additional information for the coming year is as follows:
Fixed selling and administrative expense for Paulson Computers is $2,959,700 per year.
1(a) Calculate the unit variable cost under variable costing.
2. Prepare a segmented variable-costing income statement for next year. The segments correspond to product lines: consumer computers and small business computers. Refer to the list of Labels and Amount Descriptions for the exact wording of text items within your income statement. If an amount is negative, first enter a minus sign (-).
Paulson Computers Inc.
Segmented Variable-Costing Income Statement
For the Coming Year
1
Consumer Computers
Small Business Computers
Total
2
3
4
5
6
7
8
9
10
11
12
13
| Consumer | Small Business | |
|---|---|---|
| Computers | Computers | |
| Price | $ 643 | $ 1,676 |
| Unit direct materials | 490 | 1,179 |
| Unit direct labor | 90 | 312 |
| Unit variable overhead | 22 | 49 |
| Unit variable selling expense | 35 | 66 |
| Total direct fixed overhead | 120,000 | 350,100 |
Solution
1(a)
Consumer computers: $602 unit variable cost
Small business computers: $1540 unit variable cost
2.
| Consumer Computers | Small Business Computers | |
| Unit direct materials | 490 | 1179 |
| Unit direct labor | 90 | 312 |
| Unit variable overhead | 22 | 49 |
| Unit variable cost $ | 602 | 1540 |
