CH 6 VARIABLE COSTING x eztomheducationcomhmtpx0786599203

CH 6 VARIABLE COSTING x ? ? ? ?ezto.mheducation.com/hm.tpx?-0.7865992034053153-1532038255912 Apps Q Quest CE Ann BankingNAPA Login E & O Discussion Board G Google Calendar Club Interval Timesh PHPYohoo - login G Google Other bookmarks ?] 100.00 points Addison, Inc. makes a single product, an indoor fireplace, and has provided data from last year of operations. The Controller has asked you to compare income statements if the company used the variable costing approach vs. the absorption costing report. Use the information included in the Excel Simulation and the Excel functions described below to complete the task. . Cell Reference: Allows you to refer to data from another cell in the worksheet. From the Excel Simulation below, if in a blank cell, B3 was entered, the formula would output the result from cell B3, or 420 in this example . Basic Math functions: Allows you to use the basic math symbols to perform mathematical functions. You can use the following keys: (plus sign to add), (minus sign to subtract), (asterisk sign to multiply), and (forward slash to divide). From the Excel Simulation below, if in a blank cell -B15+B16 was entered, the formula would add the values from those cells and output the result, or 9,500 in this example. If using the other math symbols the result would output an appropriate answer for its function SUM function: Allows you to refer to multiple cells and adds all the values. You can add individual cell references or ranges to utilize this function. From the Excel Simulation below, if in a blank cell-SUM(B6,B7,B8) was entered, the formula would output the result of adding those three separate cells, or 215 in this example. Similarly, if in a blank cell-SUMB6:B8) was entered, the formula would output the same result of adding those cells, except they are expressed as a range in the formula, and the result would be 215 in this example Variable and Absorption Costing - Excel FILE HOME | INSERT PAGE LAYOUT FORMULAS DATA REVIEW VIEW Sign In bs Ca bri B 1 U·?·?.. . Alignment Number Conditional Forme tas. Cell Cells Editing Formatting Table Styles Cilpboard Font A1 vX fAddison, Inc. makes a single product, an indoor fireplace. Data for last year is as v 3:11 PM 7/19/2018 1 Addison, Inc. makes a single an indoor firepace. Data for last vear is as follows: Selling price per fireplace $420

Solution

Answer 1. Calculation of Cost per Unit Under Variable Costing 5,000 Units Manufactured Direct Material                 135.00 Direct Labor                   43.00 Variable Manufacturing Overhead                   37.00 Total Cost per Unit                 215.00 Income Statement Under Variable Costing Amount Sales - 4,500 Units X $420    1,890,000.00 Variable Costs: Variable Cost of Goods Sold - 4,500 Units X $215         967,500.00 Variable Selling & Admn. Expense - 4,500 Units X $45         202,500.00 Total Variable Costs    1,170,000.00 Contribution Margin        720,000.00 Fixed Costs Fixed Manufacturing Cost         210,000.00 Fixed Selling & Admn. Expense         190,000.00 Total Fixed Costs        400,000.00 Operating Income        320,000.00 BEP (In Units) = Fixed Costs / Contribution Margin Per Unit Contribution per Unit = $420 (Sellling Price) - ($215 + $45) (Variable Costs) Contribution per Unit = $160 BEP (In Units) = $400,000 / $160 BEP (In Units) = 2,500 Units Answer 2 Calculation of Cost per Unit Under Absorption Costing 5,000 Units Manufactured Direct Material                 135.00 Direct Labor                   43.00 Variable Manufacturing Overhead                   37.00 Fixed Manufacturing Overhead - $210,000 / 5,000 Units                   42.00 Total Cost per Unit                 257.00 Note: Selling and administrative expenses (both variable and fixed) are not relevant for the computation of unit product cost in both absorption costing & variable costing. Income Statement Under Absorption Costing Amount Sales - 4,500 Units X $420    1,890,000.00 Variable Costs: Cost of Goods Sold - 4,500 Units X $257    1,156,500.00 Gross Margin        733,500.00 Selling & Admn. Expenses Variable Selling & Admn. Expense - 4,500 Units X $45         202,500.00 Fixed Selling & Admn. Expense         190,000.00 Total Operating Costs        392,500.00 Operating Income        341,000.00