16)

April May
unit data Forcasted Forcasted
Beginning Inventory 0 150
production 500 500 500 400
Sales 350 520
Ending 150 30
Variable costs
Mfg cost/unit 10000 10000
operating cost/unit 3000 3000
fixed cost
Mfg cost 2000000 2000000
operating cost 600000 600000
Selling price/unit 24000 24000

1. A
Variable Costing

unit cost 13000

April May
Revenue 8400000 1.2E+07
COGS -5E+06 -7E+06
Beg. Inv 0 1950000
(+Product 6500000 5200000
(-ending I 1950000 390000
Contribution margin 3850000 5720000
Fixed costs
Mfg costs 2000000 2000000
non-mfg cost 600000 600000
Operating profit 1250000 3120000
Reconciliation:
2
Variable Costing

unit cost 13000

April May
Revenue 8400000 1.2E+07
COGS -5E+06 -7E+06
Beg. Inv 0 1950000
(+Product 6500000 5200000
(-ending I 1950000 390000
Contribution margin 3850000 5720000
Fixed costs
Mfg costs 2000000 2000000
non-mfg cost 600000 600000
Operating profit 1250000 3120000

Add. F. Mfg cost of ending inv. 600000 -600000

Operating profit Absorption cost 1850000 2520000

1. B
Absorption Costing

unit cost 14000 14000

April May
Revenue 8400000 1.2E+07
COGS -5E+06 -7E+06
Beg. Inv 0 2100000
(+Product 7000000 5600000
(-ending I 2100000 420000
Gross Profit 3500000 5200000
Period Costs
V. operating cost 1050000 1560000
F. oerating cost 600000 600000
Operating profit 1850000 3040000

Reconciliation
2
Absorption Costing
unit cost 14000 15000

April May
Revenue 8400000 1.2E+07
COGS -5E+06 -8E+06
Beg. Inv 0 2250000
(+Product 7000000 6000000
(-ending I 2100000 450000
Gross Profit 3500000 4680000
Period costs
V. operating cost 1050000 1560000
F. oerating cost 600000 600000
Operating profit 1850000 2520000

17)
April May
DM/unit 6700 6700
DL/unit 1500 1500
Mfg Overhead/unit 1800 1800

Throughput Costing

unit cost 6700

April May
Revenue 8400000 1.2E+07
COGS -2E+06 -3E+06
Beg. Inv 0 1005000
(+Product 3350000 2680000
(-ending I 1005000 201000
Contribution margin 6055000 8996000
Period costs
Fixed Mfg costs 2000000 2000000
Direct labor 750000 750000
Mfg overhead 900000 900000
non-mfg cost
Variable 1050000 1560000
Fixed 600000 600000
Operating profit 755000 3186000

18)
January February
unit data Forcasted Forcasted
Beginning Inventory 0 300
production 1000 1000 1000 800
Sales 700 800
Ending 300 300
Variable costs
Mfg cost/unit 900 900
operating cost/unit 600 600
fixed cost
Mfg cost 400000 400000
operating cost 140000 140000
Selling price/unit 2500 2500

1. A
Variable Costing

Variable unit cost 1500

January February
Revenue 1750000 2000000
COGS -1E+06 -1E+06
Beg. Inv 0 450000
(+Product 1500000 1200000
(-ending I 450000 450000
Contribution margin 700000 800000
Fixed costs
Mfg costs 400000 400000
non-mfg cost 140000 140000
Operating profit 160000 260000

1. B
Absorption Costing

unit cost 1300 1300

 January February
Revenue 1750000 2000000
COGS -910000 -1E+06
Beg. Inv 0 390000
(+Product 1300000 1040000
(-ending I 390000 390000
Gross Profit 840000 960000
Period Costs
V. operating cost 420000 480000
F. oerating cost 140000 140000
Operating profit 280000 340000

19)
January February
DM/unit 500 500
DL/unit 100 100
Mfg Overhead/unit 300 300

Throughput Costing

unit cost 500

January February
Revenue 1750000 2000000
COGS -350000 -400000
Beg. Inv 0 150000
(+Product 500000 400000
(-ending I 150000 150000
Throughput margin 1400000 1600000
Period costs
Fixed Mfg costs 400000 400000
Direct labor 100000 100000
Mfg overhead 300000 300000
non-mfg cost
Variable 420000 480000
Fixed 140000 140000
Operating profit 40000 180000
20)
2012
unit data
Beginning Inventory 85000
production 294900
Sales 345400
Ending 34500
Variable costs
Mfg cost/unit 5.1
operating cost/unit 1.1
fixed cost
Mfg cost 1440000
operating cost 1080000
Selling price/unit 22

1. A
Variable Costing

Variable unit cost 6.2

January
Revenue 7598800
COGS -2E+06
Beg. Inv 527000
(+Product 1828380
(-ending I 213900
Contribution margin 5457320
Fixed costs
Mfg costs 1440000
non-mfg cost 1080000
Operating profit 2937320

1. B
Absorption Costing
unit cost 9.983

January
Revenue 7598800
COGS -3E+06
Beg. Inv 848556
(+Product 2943990
(-ending I 344414
Gross Profit 4150668
Period Costs
V. operating cost 379940
F. oerating cost 1080000
Operating profit 2690728

2. Variable Costing:
Income as percentage of revenue= 38.66%

Absorption costing:
Income as percentage of revenue=35.41%

3. Operating income under absorption costing is lower than un

4. Variable costing is better because this method helps manage
 March

300
1000 1250
1500
50

900
600

400000
140000
2500

March
3750000
-2E+06
450000
1875000
75000
1500000

400000
140000
960000

1300
 March
3750000
-2E+06
390000
1625000
65000
1800000

900000
140000
760000

March
500
100
300

March
3750000
-750000
150000
625000
25000
3000000

400000
100000
300000

900000
140000
1160000
on costing is lower than under variable costing because units sold are greayer than units produced.
this method helps managers in analysis like CVP analysis.