QUESTION ALREADY IN CHEGG, BUT NO ANSWERS. I have the same question for my class
ID: 2464241 • Letter: Q
Question
QUESTION ALREADY IN CHEGG, BUT NO ANSWERS.
I have the same question for my class. Could use help.
https://www.chegg.com/homework-help/excel-worksheet-form-appears-used-recreate-portions-review-p-chapter-5-problem-1ae-solution-9780078025426-exc
You should proceed to the requirements below only after completing your worksheet. The LIFO inventory flow assumption is used throughout this problem.
Required:
1. Check your worksheet by changing the units sold in the Data to 6,000 for Year 2. The cost of goods sold under absorption costing for Year 2 should now be $240,000. If it isn’t, check cell C41. The formula in this cell should be = IF(C26<C27,C26*C36+(C27-C26)*B36,C27*C36). If your worksheet is operating properly, the net operating income under both absorption costing and variable costing should be $(34,000) for Year 2. That is, the loss in Year 2 is $34,000 under both systems. If you do not get these answers, find the errors in your worksheet and correct them. Why is the absorption costing net operating income now equal to the variable costing net operating income in Year 2?
Explanation / Answer
Answer:
Answer:
Data Selling Price per unit 50 Manufacturing costs: Variable per unit produced: Direct materials 11 Direct labor 6 Variable manufacturing overhead 3 Fixed manufacturing overhead per year 120000 Selling and administrative expenses: Variable per unit sold 4 Fixed per year 70000 Particulars Year 1 Year 2 Units in beginning inventory 0 Unit produced during the year 10000 6000 Unit sold during the year 8000 8000 Compute the ending inventory: Particulars Year 1 Year 2 Units in beginning inventory 0 2000 Unit produced during the year 10000 6000 Unit sold during the year 8000 8000 Units in ending inventory 2000 0 Compute the Absorption costing unit product cost: Particulars Year 1 Year 2 Direct Materials 11 11 Direct Labor 6 6 Variable manufacturing overhead 3 3 Fixed manufacturing overhead 12 20 Absorption costing unit product cost 32 40 Absorption costing income Statement Particulars Year 1 Year 2 Sales 400000 400000 COGS 256000 304000 Gross Margin 144000 96000 Selling and administrative expenses 102000 102000 Net operating income 42000 -6000 Compute the variable costing unit product cost: Particulars Year 1 Year 2 Direct Materials 11 11 Direct Labor 6 6 Variable manufacturing overhead 3 3 Variabl costing unit Product cost 20 20 Variable costing income statement: Particulars Year 1 Year 2 Sales 400000 400000 Variable expenses: Variable cost of goods sold 160000 160000 Variable selling and administative exp 32000 192000 32000 192000 Contribution margin 208000 208000 Fixed expenses: Fixed manufacturing overhead 120000 120000 Fixed selling and administrative exp 70000 190000 70000 190000 Net operating income 18000 18000