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ELISA DWI LESTARI

14080694037
S1AK14 A

EXERCISE 22-15 PREPARING INCOME STATEMENTS UNDER ABSORPTION AND


VARIABLE COST
1. Cost of goods sold under absorption costing
Unit product cost with absorption costing :
Direct materials
Direct labor
Variable Overhead
Fixed Overhead per unit produced

$35
$65
$30
$20
$150

Cost of goods sold under absorption costing

= $150 x 14,000
= $2,100,000

2. Cost of goods sold under variable costing


Unit product cost with variable costing :
Direct materials
Direct labor
Variable Overhead

$35
$65
$30
$130

Cost of goods sold under variable costing = $130 x 14,000


= $1,820,000
3. Income statement using absorption costing
B&O Cafe
Absorption-Costing Income Statement
Sales ($200 x 14,000)
Less : Cost of goods sold
Gross Margin
Less : Selling and administrative expenses

$2,800,000
$2,100,000
$700,000
$200,000

Net Income

$500,000

4. Income Statement using variable costing


B&O Cafe
Variable-Costing Income Statement
Sales ($200 x 14,000)
Less : Variable cost of goods sold
Contribution Margin
Less fixed expenses :

$2,800,000
$1,680,000
$980,000

Fixed overhead ($20 x 17000)


Fixed Selling and administrative expenses
Net Income

$340,000
$200,000

$540,000
$440,000

EXERCISE 22-16 PREPARING A SEGMENTED INCOME STATEMENT

Trendy Inc.
Segmented Income Statement
For the Coming Year

Sales

Sweaters

Jackets

Total

$300,000

$420,000

$720,000

Variable Cost of goods sold

($180,000)

($200,000)

($380,000)

Variable selling expenses

($15,000)

($21,000)

($36,000)

$105,000

$199,000

$304,000

Direct fixed overhead

($25,000)

($40,000)

($65,000)

Direct selling and administrative

($20,000)

($50,000)

($70,000)

$60,000

$109,000

$169,000

Contribution margin
Less fixed expenses :

Segment Margin

Less Common fixed expenses :


Common fixed overhead

($45,000)

Common selling and administrative

($15,000)

Operating Income

$109,000

PROBLEM 22-32 VARIABLE AND ABSORPTION-COSTING INCOME


1. Per-unit Inventory costs that will be reported on SPIDER`s balance sheet at the end of the
year :
Direct Materials
Direct labor
Variable Overheard
Variable Selling
Fixed overheard
Per-unit Inventory cost

$2.45
$2.10
$0.25
$0.30
$0.9
$6

Unit in Ending Inventory

= (11,300 + 200,000) 208,000


= 3,300

Total Cost

= 3,300 x $6
= $19,800

2. Absortion-costing Income Cost :


Spider Company
Absorption-Costing Income Statement
Sales ($9 x 208,000)
Less :
Cost of goods sales ($6 x 208,000)
Gross margin
Less :
Selling and administrative expenses
Operating Income

$1,872,000
$1,248,000
$624,000
$56,000
$568,000

3. Per-unit Inventory under Variable Costing :


Direct Materials
$2.45
Direct labor
$2.10
Variable Overheard
$0.25
Variable Selling
$0.30
Unit product cost

$5.1

Variable costing stresses the difference between fixed and variable manufacturing costs.
Variable costing assigns only variable manufacturing costs to the product; these costs
include direct material, direct labor, and variable overhead. Fixed overhead is treated as
period expenses and is excluded from product cost. The rarionale for this treatment is that
fixed overhead is a cost of capacity, or staying in bussines. Once the period is over. Any
benefits provided by capacity have expired an shouldn`t be inventoried. Under variable
costing, fixed overhead of a period is seen as expiring that period and is charged in total
against the revenues of the period.

4. Variable-costing Income Statement

Spider Company
Variable-Costing Income Statement
Sales ($9 x 208,000)
Less :
Variable Cost of goods sales ($5.1 x 208,000)
Gross margin
Less :
Fixed Overhead
$180,000
Selling and administrative expenses
Operating Income

$1,872,000
$1,060,800
$811,200

$56,000
$575,200

5. Absurption Costing Income if Spider company had sold 196,700 units :


Spider Company
Absorption-Costing Income Statement
Sales ($9 x 196,700)
Less :
Cost of goods sales ($6 x 196,700)
Gross margin
Less :
Selling and administrative expenses
Operating Income

$1,770,300
$1,180,200
$590,100
$56,000
$534,100

Variable-costing Income if Spider company had sold 196,700 units :


Spider Company
Variable-Costing Income Statement
Sales ($9 x 196,700)
Less :
Variable Cost of goods sales ($5.1 x 196,700)
Gross margin
Less :
Fixed Overhead
Selling and administrative expenses
Operating Income

$1,872,000
$1,060,800
$811,200
$180,000
$56,000
$575,200

Problem 22-23 VARIABLE COSTING, ABSORPTION COSTING, SEGMENTED


INCOME STATEMENTS, INVENTORY VALUATION
1. Cost of SUGARSMOOTH`s ending Inventory in the first year under absorption costing :
Cost of goods sold
= Absorption unit product cost X Unit sold
$160,500
= Absorption unit product cost X 53,500
$ 160,500
Absorption unit product cost
=
53,500

= $3
Ending Inventory = Units Produced Units Sold
= 55,000 53,500
= 1,500

Cost of SUGARSOOMTH`s ending nventory under Absorption costing :


Value of ending Inventory

= $3 x 1,500
= $4,500

2. Cost of SUGARSMOOTH`s ending Inventory in the first year under Variable costing :
Cost of goods sold
= Absorption unit product cost X Unit sold
$160,500
= Absorption unit product cost X 53,500
$ 160,500
Absorption unit product cost
=
53,500
Absorption unit product cost

= $3

Variable Unit product cost

= Absorption unit product cost Fixed Overhead


= $3 - $0.5
= $2.5
Ending Inventory = Units Produced Units Sold
= 55,000 53,500
= 1,500

a. Cost of SUGARSOOMTH`s ending nventory under Variable costing :


Value of ending Inventory

= $2.5 x 1,500
= $3,750

b. Sugarsooth Inc. Variable costing Operating Income

Sugarsmooth Inc.
Variable-Costing Income Statement
Sales (53,500 x $8.50)
Less :
Variable Cost of goods sold ($2.5 x 53,500)
Gross margin
Less :
Fixed Overhead
Selling and administrative expenses
Operating Income

$454,750
$133,750
$321,000
$27,500
$120,000

$147,500
$173,500

3. Segmented Variable-costing Income statement for following year :


Sugarsooth Inc.
Segmented Income Statement
For the Following Year
Drug store

Discount Stores

Beauty Shop

Total

Sales
Variable cost of
goods sold
Contribution Margin

$199,750

$135,000

$90,000

$424,750

$11,750
$188,000

$10,000
$125,000

$5,000
$85,000

$26,750
$398,000

$9,000
$5,000
$71,000

$45,000
$30,000
$9,000
$5,000
$309,000

Less Direct fixed Expenses :


Shipping
Clerk`s salary and benefit
Sales Commission
Extra packing expense
Segment Margin
$188,000

Add Return Penalties


Segment Income
Less Common fixed
Expense :
Fixed Overhead
Selling and administration
Expense

Operating Income

$45,000
$30,000
$50,000

$1,350
$188,000

$51,350

$1,350
$71,000

$310,350

($27,500)
($120,000)

$162,850

4. Yes, all the customer group are profitable, Drugstore with $188,000 Income, Discounted
Store with $51,350 Income, and Beauty Shop with $71,000 Income.
According to Segmented Income Statement, it`s safe for Sugarsmooth to expend it`s
marketing base

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