3. (5pts) Nothing But Gloves, Inc. is a baseball glove manufacturer that reports the following information...

 

Transcribed Image Text:

3. (5pts) Nothing But Gloves, Inc. is a baseball glove manufacturer that reports the following information from the current period for its product. Sales price per unit Manufacturing costs incurred this period: DM DL Variable OH Fixed OH Non-Manufacturing (i.e. Selling and Administrative) costs incurred this period: Variable S&A Fixed S&A Units in finished goods inventory, beginning of the month Units produced this month Units sold this month PARTA: 1) Calculate net income for the period using absorption costing (1pt). 2) Calculate net income for the period using variable costing (1pt). $125.00 $11.50 $26.00 $2.75 $144,000 $1.90 $91,375 0 40,000 35,000 per unit per unit per unit per unit Per period per unit Per period Units Units Units PARTB: Suppose the firm decides to increase its production for the period to 75,000 units (assume the firm has enough excess capacity to produce the 75,000 units) but continues to sell only 35,000 units. 1) Calculate net income for the period company using absorption costing at this new 75,000 unit level of production (1pt). 2) Compare your answer in PARTB, 1) to your answer in PARTA, 1). By how much did net income change under absorption costing? (0.5pts) 3) 4) Calculate net income for the period company using variable costing at this new 75,000 unit level of production (1pt). Compare your answer in PARTB, 3) to your answer in PARTA, 2). By how much did net income change under variable costing? (0.5pts) 3. (5pts) Nothing But Gloves, Inc. is a baseball glove manufacturer that reports the following information from the current period for its product. Sales price per unit Manufacturing costs incurred this period: DM DL Variable OH Fixed OH Non-Manufacturing (i.e. Selling and Administrative) costs incurred this period: Variable S&A Fixed S&A Units in finished goods inventory, beginning of the month Units produced this month Units sold this month PARTA: 1) Calculate net income for the period using absorption costing (1pt). 2) Calculate net income for the period using variable costing (1pt). $125.00 $11.50 $26.00 $2.75 $144,000 $1.90 $91,375 0 40,000 35,000 per unit per unit per unit per unit Per period per unit Per period Units Units Units PARTB: Suppose the firm decides to increase its production for the period to 75,000 units (assume the firm has enough excess capacity to produce the 75,000 units) but continues to sell only 35,000 units. 1) Calculate net income for the period company using absorption costing at this new 75,000 unit level of production (1pt). 2) Compare your answer in PARTB, 1) to your answer in PARTA, 1). By how much did net income change under absorption costing? (0.5pts) 3) 4) Calculate net income for the period company using variable costing at this new 75,000 unit level of production (1pt). Compare your answer in PARTB, 3) to your answer in PARTA, 2). By how much did net income change under variable costing? (0.5pts)

Answer rating: 100% (QA)

Part A 1 2 Absorption costing Direct materials Direct labor Variable manufacturing overhead Fixed ma... View the full answer