For the coming year, Paulson Computers Inc. expects to produce 144,000 computers
ID: 2610677 • Letter: F
Question
For the coming year, Paulson Computers Inc. expects to produce 144,000 computers. Of these, 64,000 will be consumer (personal) computers and 80,000 will be small business computers. Common fixed overhead is $1,700,700. Additional information for the coming year is as follows:
Fixed selling and administrative expense for Paulson Computers is $2,959,700 per year.
1(a) Calculate the unit variable cost under variable costing.
2. Prepare a segmented variable-costing income statement for next year. The segments correspond to product lines: consumer computers and small business computers. Refer to the list of Labels and Amount Descriptions for the exact wording of text items within your income statement. If an amount is negative, first enter a minus sign (-).
Paulson Computers Inc.
Segmented Variable-Costing Income Statement
For the Coming Year
1
Consumer Computers
Small Business Computers
Total
2
3
4
5
6
7
8
9
10
11
12
13
Consumer Small Business Computers Computers Price $ 643 $ 1,676 Unit direct materials 490 1,179 Unit direct labor 90 312 Unit variable overhead 22 49 Unit variable selling expense 35 66 Total direct fixed overhead 120,000 350,100Explanation / Answer
1(a)
Consumer computers: $602 unit variable cost
Small business computers: $1540 unit variable cost
2.
Consumer Computers Small Business Computers Unit direct materials 490 1179 Unit direct labor 90 312 Unit variable overhead 22 49 Unit variable cost $ 602 1540