Problem 6-22 Variable Costing Income Statements; Income Reconciliation [LO6-1, LO6-2, LO6-3] Denton Company manufactures and sells...

    

Transcribed Image Text:

Problem 6-22 Variable Costing Income Statements; Income Reconciliation [LO6-1, LO6-2, LO6-3] Denton Company manufactures and sells a single product. Cost data for the product are given: Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Total variable cost per unit Fixed costs per month: Fixed manufacturing overhead Fixed selling and administrative Total fixed cost per month 6 11 3 2 $ 22 $ 96,000 163,000 $ 259,000 The product sells for $47 per unit. Production and sales data for July and August, the first two months of operations, follow: Units Units Sold Produced July 24,000 20,000 August 24,000 28,000 Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income The company's Accounting Department has prepared the following absorption costing income statements for July and August: July $ 940,000 480,000 460,000 203,000 $ 257,000 August $1,316,000 672,000 644,000 219,000 425,000 $ Required: 1. Determine the unit product cost under: a. Absorption costing. b. Variable costing. 2. Prepare variable costing income statements for July and August. 3. Reconcile the variable costing and absorption costing net operating incomes. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Determine the unit product cost under: (a) Absorption costing, (b) Variable costing. Unit Product Cost a. Absorption costing b. Variable costing 3. Reconcile the variable costing and absorption costing net operating incomes. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare variable costing income statements for July and August. Denton Company Variable Costing Income Statement Net operating income (loss) < Required 1 July August Required 3 Required: 1. Determine the unit product cost under: a. Absorption costing. b. Variable costing. 2. Prepare variable costing income statements for July and August. 3. Reconcile the variable costing and absorption costing net operating incomes. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Reconcile the variable costing and absorption costing net operating incomes. (Enter any losses or deductions as a negative value.) Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes July Variable costing net operating income (loss) Add (deduct) fixed manufacturing overhead cost deferred in (released from) inventory under absorption costing Absorption costing net operating income (loss) < Required 2 August Problem 6-22 Variable Costing Income Statements; Income Reconciliation [LO6-1, LO6-2, LO6-3] Denton Company manufactures and sells a single product. Cost data for the product are given: Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Total variable cost per unit Fixed costs per month: Fixed manufacturing overhead Fixed selling and administrative Total fixed cost per month 6 11 3 2 $ 22 $ 96,000 163,000 $ 259,000 The product sells for $47 per unit. Production and sales data for July and August, the first two months of operations, follow: Units Units Sold Produced July 24,000 20,000 August 24,000 28,000 Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income The company's Accounting Department has prepared the following absorption costing income statements for July and August: July $ 940,000 480,000 460,000 203,000 $ 257,000 August $1,316,000 672,000 644,000 219,000 425,000 $ Required: 1. Determine the unit product cost under: a. Absorption costing. b. Variable costing. 2. Prepare variable costing income statements for July and August. 3. Reconcile the variable costing and absorption costing net operating incomes. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Determine the unit product cost under: (a) Absorption costing, (b) Variable costing. Unit Product Cost a. Absorption costing b. Variable costing 3. Reconcile the variable costing and absorption costing net operating incomes. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare variable costing income statements for July and August. Denton Company Variable Costing Income Statement Net operating income (loss) < Required 1 July August Required 3 Required: 1. Determine the unit product cost under: a. Absorption costing. b. Variable costing. 2. Prepare variable costing income statements for July and August. 3. Reconcile the variable costing and absorption costing net operating incomes. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Reconcile the variable costing and absorption costing net operating incomes. (Enter any losses or deductions as a negative value.) Reconciliation of Variable Costing and Absorption Costing Net Operating Incomes July Variable costing net operating income (loss) Add (deduct) fixed manufacturing overhead cost deferred in (released from) inventory under absorption costing Absorption costing net operating income (loss) < Required 2 August

Answer rating: 100% (QA)

1 UNIT PRODUCT COST aAbsorption Costing 24 bVariable Costing 20 Working notes aAbsorption costing Di... View the full answer