Question

Greenville Corp. has determined the following selling price and manufacturing cost per unit based on normal production of 48,000 units per year:
Selling price per unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 28
Variable cost per unit: Direct materials. . . . . . . . . . . . . . . . . . . . . . . . . . .. . $ 6
Direct labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Variable factory overhead . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Variable cost per unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 16
Fixed cost per unit:
Fixed factory overhead per year . . . . . . . . . . . . . . . . . . . . . . . . . . $ 240,000
Fixed selling and administrative expense per year . . . . . . . . . . . 60,000


January has no beginning inventories.

Required:
Prepare comparative income statements, including a comparative schedule of cost of goods sold, for each of these three months in 2013 under each of the following:
1. Absorption costing (include under- or overapplied overhead).
2. Variablecosting.


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  • CreatedMay 05, 2014
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