[abobo96]

Please: Dexter Company produces and sells a single product, a wooden hand loom for weaving small items such as scarves. Selected cost and operating data relationg to the product for two years are given below:

Selling price per unit 50
Manufacturing costs:
Variable per unit produced:
Direct materials 11
Direct labour 6
Variable overhead 3
Fixed per year 120,000
Selling and administrative costs:
Variable per unit sold 5
Fixed per year 70,000

Year 1 Year 2
Units in beginning inventory 0 2,000
Units produced during the year 10,000 6,000
Units sold during the year 8,000 8,000
Units in ending inventory 2,000 0

1. Assume that the company uses absorption costing
(a) Compute the unit product cost in each year.
(b) Prepare an income statement for each year.

2. Assume that the company uses variable costing
(a) Compute the unit product cost in each year
(b) Prepare an income statement for each year.

3. Reconcile the variable costing and absorption costing net income figures.

[abobo96]

please help, Dexter Company produces and sells a single product, a wooden hand loom for weaving small items such as scarves. Selected cost and operating data relationg to the product for two years are given below:

Selling price per unit 50
Manufacturing costs:
Variable per unit produced:
Direct materials 11
Direct labour 6
Variable overhead 3
Fixed per year 120,000
Selling and administrative costs:
Variable per unit sold 5
Fixed per year 70,000

Year 1 Year 2
Units in beginning inventory 0 2,000
Units produced during the year 10,000 6,000
Units sold during the year 8,000 8,000
Units in ending inventory 2,000 0

1. Assume that the company uses absorption costing
(a) Compute the unit product cost in each year.
(b) Prepare an income statement for each year.

2. Assume that the company uses variable costing
(a) Compute the unit product cost in each year
(b) Prepare an income statement for each year.

3. Reconcile the variable costing and absorption costing net income figures.

[abobo96]

Thank you for the answer!

[abobo96]

Please help the question below;
From the following data for a company which started operation at the beginning of the year, discuss the contention that “marginal costing rewards sales whereas absorption costing rewards production”.

January February March
Sales 6,000 7,500 5,000
Production 8,000 7,000 16,000

1. Selling price = $120 per unit

2. Production cost per unit
Direct materials $30
Direct labor $20
Variable overheads $15
Fixed overhead $25 (this is based on an estimated normal level of 22,500 units per quarter)

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