Yost Company began its operations in the current year. It manufactures and sells only one product. During the year, Yost produced 210,000 units and sold 170,000 units at $425 each.
At the beginning of the year, Yost estimated that it would produce 220,000 units.
Determine the unit cost for Yost under both absorption and variable costing.
Because fixed overhead allocation is based on a predetermined rate, which is set during planning at the beginning of the period, the amount to be allocated per unit will be based on production, but only in the case of fixed overhead being classified as a Cost.
Variable Costs
Direct materials........................................................$68
Direct labor................................................................51
Variable overhead......................................................17
Fixed Costs
Fixed overhead costs....................................$7,480,000
Fixed selling and administrative expenses 9,350,000
If an amount is zero, enter "0".
The difference between unit costs under absorption costing and variable costing is the classification of what cost? Under variable costing, this cost is classified as a cost.
How many units did Yost have in ending inventory? Units
What is the value of Yost's ending inventory under absorption costing? $
What is the value of Yost's ending inventory under variable costing? $
APPLY THE CONCEPTS:
Construct the absorption-costing and variable-costing income statements
Using the data from above, complete the following income statements.
Yost Company
Absorption-Costing Income Statement
Sales $
Gross margin $
Operating income $
Variable-Costing Income Statement
Sales $
Less variable expenses: $
Variable selling and administrative expenses $ 0
Gross margin $
Less fixed expenses: $
Operating income $