Cost of Goods Manufactured using Variable and Absorption Cos

Cost of Goods Manufactured, using Variable and Absorption Costing On June 30, the end of the first year of operations, Johnson Industries, Inc., manufactured 2,700 units and sold 2,300 units. The following income statement was prepared, based on the variable costing concept: Johnson Industries, Inc. Variable Costing Income Statement For the Year Ended June 30, 2016 Sales $805,000 Variable cost of goods sold: Variable cost of goods manufactured $453,600 Less inventory, June 30 67,200 Variable cost of goods sold 386,400 Manufacturing margin $418,600 Variable selling and administrative expenses 96,600 Contribution margin $322,000 Fixed costs: Fixed manufacturing costs $207,900 Fixed selling and administrative expenses 64,400 272,300 Income from operations $49,700 Determine the unit cost of goods manufactured, based on (a) the variable costing concept and (b) the absorption costing concept.

Variable costing $__

Absorption costing $__

Solution

unit cost of goods manufactured a) Variable costing concept 453,600/2,700 168 answer b) Absorption costing concept Variable costing 168 FMOH (207900/2,700) 77 unit product cost 245 answer