the east coast company has built a massive water-desalting factory next to atlantic ocean. the factory is
Question:
the east coast company has built a massive water-desalting factory next to atlantic ocean. the factory is completely automated. it has its own source of power, light, heat and so on. the salt water costs not nothing . its has both variable and fixed manufacturing costs its variable cost are $0.14 per litre and its fixed manufacturing costs are $385,000 per year. the desalted water is not sold to household consumers. it has a special taste that appeals to local breweries, distilleries and soft-drink manufacturers. the price,$0.60 per litre, is expected to remain unchanged for quite sometime. the following are data regarding the first two years of operations: in liters total costs sales production manufacturing other 2010 1,750,000 3,500,000 $ 385,000 $195,000 2011 1,750,000 0 $ 385,000 $195,000 sales(1,750,000 for both years) & production3,500,00 in 2010 and 0 in 2011) are in litres and manufacturing($ 385,000 for both years) and other ($195,000)are in cost 1. prepare three-column income statements for 2010, for 2011 and for the two years together using (a) variable costing and (b) absorption costing- begin by preparing the three column income statement with option 1, if normal capacity was the production units in 2010; then prepare the three-column income statement with option 2, if normal capacity was the units sold ( if there is not a cost, leave the cell blank. use parentheses or a minus sign for overapplied overhead amounts and nets losses. round all interim calculations to the nearest cent. rounding you final answers to the nearest whole dollar.) 1(b) option 1 option 2 2010 2011 total 2010 2011 total sales less cost of goods sold: beginning inventory cost of goods manufactured cost of goods available for sale ending inventory cost of goods sold-at normal cost underappled overhead- overappled overhead- other expenses total charges net income(loss) 2. what inventory costs would be carried on the balance sheet at december 31, 2010 and december 31, 2011, under each method?
Introduction to Management Accounting
ISBN: 978-0133058789
16th edition
Authors: Charles Horngren, Gary Sundem, Jeff Schatzberg, Dave Burgsta