Question

James company uses absorption costing and Barry company uses variable costing. Which of the following costs...

James company uses absorption costing and Barry company uses variable costing. Which of the following costs would be treated differently by James and Barry and why?

Direct Labor -

Manufacturing Overhead -

Fixed Administrative Costs -

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Out of the three costs mentioned below, Manufacturing overhead would be treated differently by James Company & Barry Company.

Variable costing method & absorption costing method treat manufacturing overhead differently.

Under variable costing method, manufacturing overhead is recognised in the period in which it is incurred irrespective of the fact that it may not be sold in the same period but in a later period.

Under absorption costing method, manufacturing overhead is recognised in the period in which the goods on which it is incurred is sold.

Looking forward to your upvote. Thanks!!

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Exercise 6-1 (Algo) Variable and Absorption Costing Unit Product Costs [LO6-1] Ida Company produces a handcrafted...
Exercise 6-1 (Algo) Variable and Absorption Costing Unit Product Costs [LO6-1] Ida Company produces a handcrafted musical instrument called a gamelan that is similar to a xylophone. The gamelans are sold for $868. Selected data for the company’s operations last year follow: Units in beginning inventory 0 Units produced 12,000 Units sold 9,000 Units in ending inventory 3,000 Variable costs per unit: Direct materials $ 270 Direct labor $ 330 Variable manufacturing overhead $ 62 Variable selling and administrative $...
Exercise 19-9  Income statement under absorption costing and variable costing  P1  P2 Cool Sky reports the following costing data...
Exercise 19-9  Income statement under absorption costing and variable costing  P1  P2 Cool Sky reports the following costing data on its product for its first year of operations. During this first year, the company produced 44,000 units and sold 36,000 units at a price of $140 per unit. Manufacturing costs Direct materials per unit $60 Direct labor per unit $22 Variable overhead per unit $8 Fixed overhead for the year $528,000 Selling and administrative costs Variable selling and administrative cost per unit $11...
Which of the following statements about variable costing systems is true? A.    Variable overhead costs...
Which of the following statements about variable costing systems is true? A.    Variable overhead costs are treated as period costs B.    Fixed overhead costs are treated as product costs C.    Only direct materials and direct labor are included in total cost D.    Fixed overhead costs are treated as period costs
Exercise 6-9 Variable and Absorption Costing Unit Product Costs and Income Statements [LO6-1, LO6-2, LO6-3] Walsh...
Exercise 6-9 Variable and Absorption Costing Unit Product Costs and Income Statements [LO6-1, LO6-2, LO6-3] Walsh Company manufactures and sells one product. The following information pertains to each of the company’s first two years of operations: Variable costs per unit: Manufacturing: Direct materials $ 22 Direct labor $ 12 Variable manufacturing overhead $ 4 Variable selling and administrative $ 3 Fixed costs per year: Fixed manufacturing overhead $ 400,000 Fixed selling and administrative expenses $ 60,000 During its first year...
Exercise 6-3 Income reporting under absorption costing and variable costing LO P2 Sims Company, a manufacturer...
Exercise 6-3 Income reporting under absorption costing and variable costing LO P2 Sims Company, a manufacturer of tablet computers, began operations on January 1, 2017. Its cost and sales information for this year follows. Manufacturing costs Direct materials $ 40 per unit Direct labor $ 60 per unit Overhead costs for the year Variable overhead $ 3,000,000 Fixed overhead $ 7,000,000 Selling and administrative costs for the year Variable $ 750,000 Fixed $ 4,750,000 Production and sales for the year...
Example – Variable vs. Full Absorption Costing A company that uses a FIFO inventory system and...
Example – Variable vs. Full Absorption Costing A company that uses a FIFO inventory system and began operations in Year 1 has the following information.                                                            Year 1                         Year 2        Sales units                                       8,000                         10,000        Selling price                                      $45                              $46        Production units                           12,000                           8,000        Unit direct material cost                 $2.00                           $2.00        Unit direct labor cost                      $1.00                           $1.00        Unit commission cost                       $.50                             $.50        Annual Fixed Overhead           $180,000                     $180,000        Annual Fixed S,G,&A              $140,000                     $150,000 1.    What are...
Part A: Variable and Absorption Costing Unit Product Costs and Income Statements High Country, Inc., produces...
Part A: Variable and Absorption Costing Unit Product Costs and Income Statements High Country, Inc., produces and sells many recreational products. The company has just opened a new plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data related to May, the first month of the plant’s operation: Beginning inventory 0 Units produced 10,000 Units sold 8,000 Selling price per unit $ 75 Selling and administrative expenses: Variable per...
Exercise 19-3 Income reporting under absorption costing and variable costing LO P2 Sims Company, a manufacturer...
Exercise 19-3 Income reporting under absorption costing and variable costing LO P2 Sims Company, a manufacturer of tablet computers, began operations on January 1, 2017. Its cost and sales information for this year follows. Manufacturing costs Direct materials $ 40 per unit Direct labor $ 60 per unit Overhead costs for the year Variable overhead $ 3,000,000 Fixed overhead $ 7,000,000 Selling and administrative costs for the year Variable $ 770,000 Fixed $ 4,250,000 Production and sales for the year...
Bluestone llc uses variable costing and absorption costing. In the variable costing income statement which of...
Bluestone llc uses variable costing and absorption costing. In the variable costing income statement which of the following is a period cost? a) direct materials b) direct labor c) both a and b d) neither a nor b
Income Statements under Absorption and Variable Costing Patagucci Inc. manufactures and sells athletic equipment. The company...
Income Statements under Absorption and Variable Costing Patagucci Inc. manufactures and sells athletic equipment. The company began operations on August 1, 2016, and operated at 100% of capacity (38,500 units) during the first month, creating an ending inventory of 3,500 units. During September, the company produced 35,000 garments but sold 38,500 units at $80 per unit. The September manufacturing costs and selling and administrative expenses were as follows: Number of Units Unit Cost Total Cost Manufacturing costs in September beginning...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT