The multi-producer company ASTER provides for one of its products, product A, the following cost data referring
Question:
The multi-producer company ASTER provides for one of its products, product “A”, the following cost data referring to a quarterly activity:
• Direct manufacturing costs per unit produced:
− Raw Material consumption/cost, variable 50€ − Labor cost, variable 125€ − Supplies cost, variable 100€
• Commercial costs per unit sold:
− Sale’scommissionperunit 10€
• Indirect costs/Overheads for the quarter attributed to product "A"
− Manufacturing costs, fixed 15.000€
− Administration costs, fixed 2.500€
The above costs are repeated for each quarter of the current financial year.
The company controls its warehouses through a perpetual inventory system and uses the LIFO method in the valuation of inventory issues. At the beginning of the year, there were no stocks of product “A”.
The manufacturing and sales data for product “A” for the first three quarters of the current year and it's accumulated over the three quarters are as follows:
units | 1st quarter | 2nd quarter | 3rd quarter | Accumulated |
units produced | 240 | 300 | 360 | 900 |
units sold | 200 | 280 | 420 | 900 |
Product "A" has a sales price of 2.000€ per unit which is maintained throughout the current year.
REQUESTED, in relation to product "A":
Present the analytical income statement for each quarter and its accumulated over three quarters (4 periods, 4 columns), using the absorption or full cost system.
Cost Management Measuring Monitoring And Motivating Performance
ISBN: 9781118168875
2nd Canadian Edition
Authors: Leslie G. Eldenburg, Susan Wolcott, Liang Hsuan Chen, Gail Cook