Question: Osawa Inc planned and actually manufactured 200 000 units of its

Osawa Inc. planned and actually manufactured 200,000 units of its single product in 2013, its first year of operation. Variable manufacturing cost was $20 per unit produced. Variable operating (non-manufacturing) cost was $10 per unit sold. Planned and actual fixed manufacturing costs were $600,000. Planned and actual fixed operating (non-manufacturing) costs totalled $400,000. Osawa sold 120,000 units of product at $40 per unit.
REQUIRED
1. Osawa’s 2013 operating income using absorption costing is
(a) $440,000,
(b) $200,000,
(c) $600,000,
(d) $840,000,
(e) None of these. Show supporting calculations.
2. Osawa’s 2013 operating income using variable costing is
(a) $800,000,
(b) $440,000,
(c) $200,000,
(d) $600,000,
(e) None of these. Show supporting calculations.



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  • CreatedJuly 31, 2015
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