Dowell Company produces a single product. Its income statements under absorption costing for its first two...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Dowell Company produces a single product. Its income statements under absorption costing for its first two years of operation follow. Income Statements (Absorption Costing) Sales ($64 per unit) Cost of goods sold ($53 per unit) Gross profit Selling and administrative expenses Income Additional Information Year 1 $ 2,368,000 Year 2 $ 4,416,000 3,657,000 1,961,000 407,000 308,000 759,000 436,000 $ 99,000 $ 323,000 a. Sales and production data for these first two years follow. Units Units produced Units sold Year 1 Year 2 53,000 37,000 53,000 69,000 b. Variable costs per unit and fixed costs per year are unchanged during these years. The company's $53 per unit product cost using absorption costing consists of the following. Direct materials Direct labor Variable overhead Fixed overhead ($583,000/53,000 units) Total product cost per unit $ 16 23 3 11 $ 53 c. Selling and administrative expenses consist of the following. Selling and Administrative Expenses Variable selling and administrative ($4 per unit sold) Fixed selling and administrative Total Year 1 $ 148,000 160,000 $ 308,000 Year 2 $ 276,000 160,000 $ 436,000 Required: Prepare income statements for each of these two years under variable costing. Note: Loss amounts should be entered with a minus sign. DOWELL Company Income Statements (Variable Costing) Year 1 Year 2 $ 2,368,000 $ 4,416,000 Income (Loss) Dowell Company produces a single product. Its income statements under absorption costing for its first two years of operation follow. Income Statements (Absorption Costing) Sales ($64 per unit) Cost of goods sold ($53 per unit) Gross profit Selling and administrative expenses Income Additional Information Year 1 $ 2,368,000 Year 2 $ 4,416,000 3,657,000 1,961,000 407,000 308,000 759,000 436,000 $ 99,000 $ 323,000 a. Sales and production data for these first two years follow. Units Units produced Units sold Year 1 Year 2 53,000 37,000 53,000 69,000 b. Variable costs per unit and fixed costs per year are unchanged during these years. The company's $53 per unit product cost using absorption costing consists of the following. Direct materials Direct labor Variable overhead Fixed overhead ($583,000/53,000 units) Total product cost per unit $ 16 23 3 11 $ 53 c. Selling and administrative expenses consist of the following. Selling and Administrative Expenses Variable selling and administrative ($4 per unit sold) Fixed selling and administrative Total Year 1 $ 148,000 160,000 $ 308,000 Year 2 $ 276,000 160,000 $ 436,000 Required: Prepare income statements for each of these two years under variable costing. Note: Loss amounts should be entered with a minus sign. DOWELL Company Income Statements (Variable Costing) Year 1 Year 2 $ 2,368,000 $ 4,416,000 Income (Loss)
Expert Answer:
Related Book For
Financial and Managerial Accounting Information for Decisions
ISBN: 978-0078025761
6th edition
Authors: John Wild, Ken Shaw, Barbara Chiappetta
Posted Date:
Students also viewed these accounting questions
-
Mertel Insurance is implementing a MicrosoftSQL Serverdatabase that will track customer information, policy information, and transaction histories. The biggest concern is providing access to the...
-
points Prepare adjusting entries for the following transaction: Manchester Company has BD 9,500 supplies account balance on January 1, 2019. During the year, it purchases BD 7,000 of supplies. At the...
-
Prepare journal entries to record the following grant-related transactions of an enterprise fund activity. Explain how these transactions should be reported in the enterprise funds financial...
-
Last weekend, Bob attended the university football game. At the opening kickoff, the crowd stood up. Bob therefore realized that he would have to stand up as well to see the game. For the crowd (not...
-
If a funnel symbol appears next to a fields name in the Query Builder dialog box, it indicates that the field is ___________________. a. Used in an ORDER BY clause in a SELECT statement b. Used in a...
-
In 1970, Rose Mary Knick purchased 90 acres of land in Scott Township, Lackawanna County, Pennsylvania. In 2008, another resident of Scott Township discovered documents that suggested that one of...
-
Waterbury Corporation issued $16,000,000 in 8.5 percent, five-year bonds on March 1, 2014, at 96. The semiannual interest payment dates are September 1 and March 1. Prepare the journal entries to...
-
QUESTION IO.17 (Applicationofdecline invaluemethods) George Bensonisa45-year-oldresident taxpayerwhohasconducted businessasanITProgrammerfor8yearsandhasannualturnover below...
-
Suppose during an execution of an instruction, the Stack Pointer register had the value 000Ch. After that an interrupt occurred and 8086 started servicing the interrupt after completing mandatory...
-
What are the types of credit agreements a firm can get that are secured by its accounts receivable as collateral?
-
Why should we be more concerned with the marginal tax rate rather than the average tax rate?
-
How are taxes owed computed?
-
(IRR) Ives Roche, a perfume and cosmetics store, is considering a new project, which costs $1,000,000 and is expected to last 15 years. The project will produce $150,000 cash flows per year. The...
-
What does each part tell us about a company?
-
Sharon Love entered into a written lease agreement with Monarch Apartments (Monarch) for apartment 4 at 441 Winfield in Topeka, Kansas. Shortly after moving in, she experienced serious problems with...
-
d. The characteristic equation of a control system is given by s+2s+8s+12s+20s+16+16=0. Determine the number of the roots of the equation which lie on the imaginary axis of s-plane
-
Diaz Company reports the following variable costing income statement for its single product. This company's sales totaled 50,000 units, but its production was 80.000 units. It had no beginning...
-
Refer to Google's balance sheet in Appendix A. What accrued expense (liabilities) does Google report at December 31, 2013?
-
Li Company produces a product that sells for $84 per unit. A customer contacts Li and offers to purchase 2,000 units of its product at a price of $68 per unit. Variable production costs with this...
-
Design a fast LOT-based filter bank with at least eight sub-bands.
-
Prove the relationship in Equation (9.210). CC2=CC = 0, (9.210)
-
Show that the relations in Equations (9.256)-(9.258) are valid. E(z) = [C3+2 (I - 3)]4. (9.256)
Study smarter with the SolutionInn App