Tutorial 11 Questions - Chp 8 Var Costing
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School
University of Malaya**We aren't endorsed by this school
Course
ACC 1004
Subject
Accounting
Date
Jan 12, 2025
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Uploaded by ConstableFreedom5969
1CIA 1004 - Tutorial Questions for:Tutorial No. 10 – Week Beginning 6 January/13 January 2025Text Book: Hilton, R.W. & Platt, D.E. (2015). Managerial Accounting, 10thEdn, McGraw-HillChapter 8: Variable CostingQuestions: 8.1, 8.4, 8.8, 8.13Exercises: 8.22, 8.24Question 8.1 Briefly explain the difference between absorption costing and variable costing.Extra Questions:1.The Dean Company produces and sells a single product. The following data refer to the year just completed:Beginning inventory........................................................0Units produced.................................................................20,000Units sold.........................................................................19,000Selling price per unit........................................................$350Selling and administrative expenses:Variable per unit...........................................................$10Fixed (total)..................................................................$225,000Manufacturing costs:Direct materials cost per unit........................................$190Direct labor cost per unit..............................................$40Variable manufacturing overhead cost per unit............$25Fixed manufacturing overhead (total)..........................$250,000Assume that direct labor is a variable cost.Required:a.Compute the cost of a single unit of product under both the absorption costing and variable costing approaches.b.Prepare an income statement for the year using absorption costing.c.Prepare an income statement for the year using variable costing.d.Reconcile the absorption costing and variable costing net operating income figures in (b) and (c) above.
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32.Pacht Company, which has only one product, has provided the following data concerning its most recent month of operations: (No need to do)Selling price...............................................$121Units in beginning inventory.....................400Units produced...........................................6,800Units sold...................................................6,900Units in ending inventory...........................300Variable costs per unit:Direct materials.......................................$35Direct labor.............................................$36Variable manufacturing overhead...........$3Variable selling and administrative........$4Fixed costs:Fixed manufacturing overhead...............$197,200Fixed selling and administrative.............$96,600The company produces the same number of units every month, although the sales in units vary from month to month. The company's variable costs per unit and total fixed costs have been constant from month to month.Required:a.What is the unit product cost for the month under variable costing?b.Prepare an income statement for the month using the contribution format and the variable costing method.c.Without preparing an income statement, determine the absorption costing net operating income for the month. (Hint: Use the reconciliation method.)