Coel Sky reports the following costing data on is product for its first yeer of
ID: 2595470 • Letter: C
Question
Coel Sky reports the following costing data on is product for its first yeer of operstions. During thic firsat yeer the company produced 44,000 units and sold 36.000 units at e price of $140 per unit Dtrect materialt per unit DSrect labor per unit Variaole overhead per unit Part 2 of 4 s22 For the yeir s 523,aee variaole sellig and adeinistrative cost per unit e cost per year 5 385,0 Bsc Exercise 6-9 Part 1b %. Assume the company vses sbsorption cosong Pepere ts ineerse stateneentofthener under absorption cost ng. lanceExplanation / Answer
WNotes
per unit product cost
Absorption costing
Direct material
$60
Direct labor
$22
Variable manufacturing overhead
$8
Fixed manufacturing overhead [528000/44000]
$12
cost per unit
$102
1b)
sales revenue [ 36000*140]
$5,040,000
Less: cost of goods sold
Beginning inventory
0
cost of goods manufactured [44000*102]
$4,488,000
cost of goods available for sale
$4,488,000
Less: Ending inventory [(44000-36000)*102]
($816,000)
cost of goods sold($4,488,000-$816,000)
($3,672,000)
Gross profit
$1,368,000
Less: selling and administration cost
Variable cost [36000*10]
$360,000
Fixed cost
$105,000
Total selling and administration cost
($465,000)
Net income($1,368,000-$465,000)
$903,000
2a)
per unit product cost using
variable costing
Direct material
$60
Direct labor
$22
Variable overhead
$8
Fixed overhead
-
Total unit cost
$90
2b)
sales revenue [ 36000*140]
$5,040,000
Less: Variable cost of goods sold
Beginning inventory
0
Variable cost of goods manufactured [44000*90]
$3,960,000
Variable cost of goods available for sale
$3,960,000
Less: closing inventory [(44000-36000)*90]
($720,000)
($3,240,000)
Gross contribution margin
$1,800,000
Less: selling and administration cost
Variable selling cost [36000*10]
($360,000)
fixed selling cost
($105,000)
Fixed overhead (period cost)
($528,000)
Total cost
($993,000)
Net income (loss)
$807,000
per unit product cost
Absorption costing
Direct material
$60
Direct labor
$22
Variable manufacturing overhead
$8
Fixed manufacturing overhead [528000/44000]
$12
cost per unit
$102