Concepts Beginning finished good inventory (*) Beginning work in progress inventory (*) Manufacturing variable costs Manufacturing...
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Concepts Beginning finished good inventory (*) Beginning work in progress inventory (*) Manufacturing variable costs Manufacturing fixed costs Ending work in progress inventory (*) Units Manufactured Units sold and revenues Units 50 125 165 Total amount € 54,975 15,000 135,000 60,000 10,000 360,000 (*) These amounts are calculated under full (absorption) costing system. It is estimated that 60% of these are variable costs. Required: Using the Full (Absorption) Costing System 1.- Calculate cost of goods manufactured and the cost of goods sold. 2.- Prepare an income statement and calculate the operating income. The sales commissions and other marketing costs variables are 10% of sales. Fixed commercial costs are € 22,000 and fixed administration costs are € 16,000. Using the Variable Costing System 1.- Calculate cost of goods manufactured and the cost of goods sold. 2.- Prepare an income statement and calculate the operating income. Compare both income statement and ending finished good inventories and comment the results. Concepts Beginning finished good inventory (*) Beginning work in progress inventory (*) Manufacturing variable costs Manufacturing fixed costs Ending work in progress inventory (*) Units Manufactured Units sold and revenues Units 50 125 165 Total amount € 54,975 15,000 135,000 60,000 10,000 360,000 (*) These amounts are calculated under full (absorption) costing system. It is estimated that 60% of these are variable costs. Required: Using the Full (Absorption) Costing System 1.- Calculate cost of goods manufactured and the cost of goods sold. 2.- Prepare an income statement and calculate the operating income. The sales commissions and other marketing costs variables are 10% of sales. Fixed commercial costs are € 22,000 and fixed administration costs are € 16,000. Using the Variable Costing System 1.- Calculate cost of goods manufactured and the cost of goods sold. 2.- Prepare an income statement and calculate the operating income. Compare both income statement and ending finished good inventories and comment the results.
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To calculate the cost of goods manufactured and the cost of goods sold using both Full Absorption Costing System and Variable Costing System well need to follow some standard accounting calculations L... View the full answer
Related Book For
Managerial Accounting
ISBN: 978-1118385388
2nd edition
Authors: Ramji Balakrishnan, Konduru Sivaramakrishnan, Geoff B. Sprinkle
Posted Date:
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