The Mopart Division produces a single product Its standard cost
The Mopart Division produces a single product. Its standard cost system uses a flexible budget to as-sign indirect costs on the basis of standard direct labor hours. At the budgeted volume of 4,000 direct labor hours, the standard cost per unit is as follows:
Selling price............. $ 38.00
Direct materials, 3 pounds @ $ 5..... $ 15.00
Direct labor, 0.4 hour @ $ 20 ..... 8.00
Variable indirect costs, 0.4 hour @$ 6. 2.40
Fixed indirect costs, 0.4 hour @ $ 4.. 1.60
Total cost ............. $ 27.00
For the month of March, the following actual data were reported: Units produced 9,000 Number of direct labor hours 3,800 Actual wage rate $ 20.50 Direct materials used ( pounds) 28,000 Average price of materials used $ 5.50 Average selling price $ 38.75 Number of units sold 8,800 Variable indirect costs $ 21,500 Fixed indirect costs $ 15,800 Variable selling and administrative costs $ 34,500 Fixed selling and administrative costs $ 28,000
There was no beginning inventory.

Required:
a. Analyze the results of operations for March. Support your analysis.
b. Present two income statements in good format using absorption costing and variable costing net income.
c. Reconcile any difference in net income between the two statements.
d. What is the opportunity cost of the unused normalcapacity?
Membership TRY NOW
  • Access to 800,000+ Textbook Solutions
  • Ask any question from 24/7 available
    Tutors
  • Live Video Consultation with Tutors
  • 50,000+ Answers by Tutors
OR
Relevant Tutors available to help