Can you please help me attached is a picture with my work? Security Technology I
ID: 2518609 • Letter: C
Question
Can you please help me attached is a picture with my work?
Security Technology Inc. (STI) is a manufacturer of an electronic control system used in the manufacture of certain special-duty auto transmissions used primarily for police and military applications. The part sells for $40 per unit and had sales of 24,550 units in the current year, 2015. STI has no inventory on hand at the beginning of 2015 and is projecting sales of 27,650 units in 2016. STI is planning the same production level for 2016 as in 2015, 26,100 units. The variable manufacturing costs for STI are $11 and the variable selling costs are only $0.90 per unit. The fixed manufacturing costs are $130,500 per year and the fixed selling costs are $610 per year.
Prepare a reconciliation and explanation of the difference each year in the operating income resulting from the full- and variable-costing methods. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your "Fixed overhead rate" answers to 2 decimal places, and other final answers to nearest whole dollar amount.)
Question 3 SECURITY TECHNOLOGY INC. Reconciling Difference in Operating Income between Full and Variable Costing 2015 2016 Change in inventory in units Multiply times fixed overhead rate Difference in operating income $0 $0
Security Technology Inc. (STI) is a manufacturer of an electronic control system used in the manufacture of certain special-duty auto transmissions used primarily for police and military applications. The part sells for $40 per unit and had sales of 24,550 units in the current year, 2015. STI has no inventory on hand at the beginning of 2015 and is projecting sales of 27,650 units in 2016. STI is planning the same production level for 2016 as in 2015, 26,100 units. The variable manufacturing costs for STI are $11 and the variable selling costs are only $0.90 per unit. The fixed manufacturing costs are $130,500 per year and the fixed selling costs are $610 per year.
Required: 1. Prepare an income statement for each year using full costing. (Round your final answers to nearest whole dollar amount.)
2. Prepare an income statement for each year using variable costing. (Round your final answers to nearest whole dollar amount.)
3.
Prepare a reconciliation and explanation of the difference each year in the operating income resulting from the full- and variable-costing methods. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your "Fixed overhead rate" answers to 2 decimal places, and other final answers to nearest whole dollar amount.)
ot 24 eling costs are $130,500 per year and the foed selling Required: for shle in
Explanation / Answer
Full Costing Income Statements 2015 (in $) 2016 (in $) Unit Sold 24550 Unit 27650 Unit Sales Revenue (a) 982,000 1,106,000 Cost of Goods Sold Beginning Inventory 0 24,800 Cost of Goods Manufactured ( 26,100 x $ 16) ($11+$130500/26100)=$16 417,600 417,600 Cost of Goods Available for Sale 417,600 442,400 Less: Ending Inventory (26100-24550)*$16 24,800 0 Cost of Goods Sold (b) 392,800 442,400 Gross Margin (a-b) 589,200 663,600 Less: Selling and Administrative Expenses Variable @$0.90 22,095 24,885 Fixed 610 610 Total Selling and Adminstrative Expenses 22,705 25,495 Net Operating Income ( Loss) 566,495 638,105 Variable Costing Income Statements : Particular 2015 ( In $) 2016 ( in $) Unit Sold 24550 Unit 27650 Unit Sales Revenue (a) 982,000 1,106,000 Less : Variable Cost of Goods Sold @$11 270,050 304,150 Selling and Administrative Expenses @0.90 22,095 24,885 Total Variable Costs (b) 292,145 329,035 Contribution Margin (c=a-b) 689,855 776,965 Fixed Costs Manufacturing 130,500 130,500 Selling and Administrative 610 610 Total Fixed Costs (d) 131,110 131,110 Net Operating Income ( Loss) (c-d) 558,745 645,855 Reconciliation between full and variable costing net operating income: 2015 2016 $ $ Full Costing Net Operating Income 566,495 638,105 Add: Beginning inventory ( 1,550x $ 130500 / 26100) 0 7,750 Less: Ending inventory -7,750 0 Variable Costing Net Operating Income 558,745 645,855