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  • Assignment - Variable Costing and Absorption Costing

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    Jeck Sison
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    The VArfull Company provided standard costs per unit for direct materials, direct labor, and variable overhead for 2007 and 2008. Production and sales figures for the two years were presented. Total fixed manufacturing overhead and fixed selling and administrative expenses were also provided. The required task is to prepare income statements for 2007 and 2008 under direct costing and absorption costing methods and reconcile the differences in net income between the two methods for each year and combined.

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    managerial accounting

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    The VArfull Company provided standard costs per unit for direct materials, direct labor, and variable overhead for 2007 and 2008. Production and sales figures for the two years were presented. Total fixed manufacturing overhead and fixed selling and administrative expenses were also provided. The required task is to prepare income statements for 2007 and 2008 under direct costing and absorption costing methods and reconcile the differences in net income between the two methods for each year and combined.

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    265 visualizzazioni1 pagina

    Assignment - Variable Costing and Absorption Costing

    Caricato da

    Jeck Sison
    The VArfull Company provided standard costs per unit for direct materials, direct labor, and variable overhead for 2007 and 2008. Production and sales figures for the two years were presented. Total fixed manufacturing overhead and fixed selling and administrative expenses were also provided. The required task is to prepare income statements for 2007 and 2008 under direct costing and absorption costing methods and reconcile the differences in net income between the two methods for each year and combined.

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    © All Rights Reserved
    Scarica in formato DOCX, PDF, TXT o leggi online su Scribd
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    di 1

    The VArfull Company presented the following data for 2007 and 2008

    Standard costs per unit


    Direct materials
    Direct Labor

    P13.00
    10.00

    Variable factory overhead 2.00


    Variable cost per unit

    25.00

    Production and Sales-Unit


    2007 Production

    17,000

    2007 Sales

    14,000

    2008 production

    14,000

    2008 sales

    16,000

    There was no 2007 inventory beginning. The expected normal production each year
    is 15,000 units. Total Fixed manufacturing overhead each year are P120,000. Units
    produced are expected to be sold at P45.00 each.
    Fixed selling and administrative expenses are budgeted at P65,000 yearly while
    variable selling and administrative expenses are expected to be 10% of sales
    REQUIRED:
    1. Prepare income statements for the years ended December 31, 2007 and
    2008 under
    a. Direct Costing Method
    b. Absorption Costing Method
    2. Reconcile the difference in net income for 2007 and 2008 and the two years
    as a whole.

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