Question

Dowell Company produces a single product. Its income statements under absorption costing for its first two...

Dowell Company produces a single product. Its income statements under absorption costing for its first two years of operation follow. 2016 2017 Sales ($46 per unit) $ 1,150,000 $ 2,070,000 Cost of goods sold ($31 per unit) 775,000 1,395,000 Gross margin 375,000 675,000 Selling and administrative expenses 288,750 323,750 Net income $ 86,250 $ 351,250 Additional Information Sales and production data for these first two years follow. 2016 2017 Units produced 35,000 35,000 Units sold 25,000 45,000 Variable cost per unit and total fixed costs are unchanged during 2016 and 2017. The company's $31 per unit product cost consists of the following. Direct materials $ 5 Direct labor 8 Variable overhead 8 Fixed overhead ($350,000/35,000 units) 10 Total product cost per unit $ 31 Selling and administrative expenses consist of the following. 2016 2017 Variable selling and administrative expenses ($1.75 per unit) $ 43,750 $ 78,750 Fixed selling and administrative expenses 245,000 245,000 Total selling and administrative expenses $ 288,750 $ 323,750 2. What are the differences between the absorption costing income and the variable costing income for these two years? (Loss amounts should be entered with a minus sign.)

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Dowell Company produces a single product. Its income statements under absorption costing for its first two...
Dowell Company produces a single product. Its income statements under absorption costing for its first two years of operation follow. 2016 2017 Sales ($46 per unit) $ 1,104,000 $ 2,024,000 Cost of goods sold ($31 per unit) 744,000 1,364,000 Gross margin 360,000 660,000 Selling and administrative expenses 287,000 322,000 Net income $ 73,000 $ 338,000 Additional Information Sales and production data for these first two years follow. 2016 2017 Units produced 34,000 34,000 Units sold 24,000 44,000 Variable cost per...
Dowell Company produces a single product. Its income statements under absorption costing for its first two...
Dowell Company produces a single product. Its income statements under absorption costing for its first two years of operation follow. 2016 2017 Sales ($46 per unit) $ 1,104,000 $ 2,024,000 Cost of goods sold ($31 per unit) 744,000 1,364,000 Gross margin 360,000 660,000 Selling and administrative expenses 287,000 322,000 Net income $ 73,000 $ 338,000 Additional Information Sales and production data for these first two years follow. 2016 2017 Units produced 34,000 34,000 Units sold 24,000 44,000 Variable cost per...
Dowell Company produces a single product. Its income statements under absorption costing for its first two...
Dowell Company produces a single product. Its income statements under absorption costing for its first two years of operation follow. 2016 2017 Sales ($48 per unit) $ 1,104,000 $ 2,064,000 Cost of goods sold ($33 per unit) 759,000 1,419,000 Gross margin 345,000 645,000 Selling and administrative expenses 285,250 320,250 Net income $ 59,750 $ 324,750 Additional Information Sales and production data for these first two years follow. 2016 2017 Units produced 33,000 33,000 Units sold 23,000 43,000 Variable cost per...
Dowell Company produces a single product. Its income statements under absorption costing for its first two...
Dowell Company produces a single product. Its income statements under absorption costing for its first two years of operation follow. 2016 2017 Sales ($46 per unit) $ 920,000 $ 1,840,000 Cost of goods sold ($31 per unit) 620,000 1,240,000 Gross margin 300,000 600,000 Selling and administrative expenses 285,000 330,000 Net income $ 15,000 $ 270,000 Additional Information a. Sales and production data for these first two years follow. 2016 2017 Units produced 30,000 30,000 Units sold 20,000 40,000 b. Variable...
Dowell Company produces a single product. Its income statements under absorption costing for its first two...
Dowell Company produces a single product. Its income statements under absorption costing for its first two years of operation follow. 2016 2017 Sales ($46 per unit) $ 966,000 $ 1,886,000 Cost of goods sold ($31 per unit) 651,000 1,271,000 Gross margin 315,000 615,000 Selling and administrative expenses 282,000 322,000 Net income $ 33,000 $ 293,000 Additional Information Sales and production data for these first two years follow. 2016 2017 Units produced 31,000 31,000 Units sold 21,000 41,000 Variable cost per...
Dowell Company produces a single product. Its income statements under absorption costing for its first two...
Dowell Company produces a single product. Its income statements under absorption costing for its first two years of operation follow. 2016 2017 Sales ($46 per unit) $ 920,000 $ 1,840,000 Cost of goods sold ($31 per unit) 620,000 1,240,000 Gross margin 300,000 600,000 Selling and administrative expenses 290,000 340,000 Net income $ 10,000 $ 260,000 Additional Information Sales and production data for these first two years follow. 2016 2017 Units produced 30,000 30,000 Units sold 20,000 40,000 Variable cost per...
Dowell Company produces a single product. Its income statements under absorption costing for its first two...
Dowell Company produces a single product. Its income statements under absorption costing for its first two years of operation follow. 2016 2017 Sales ($46 per unit) $ 920,000 $ 1,840,000 Cost of goods sold ($31 per unit) 620,000 1,240,000 Gross margin 300,000 600,000 Selling and administrative expenses 290,000 340,000 Net income $ 10,000 $ 260,000 Additional Information Sales and production data for these first two years follow. 2016 2017 Units produced 30,000 30,000 Units sold 20,000 40,000 Variable cost per...
[The following information applies to the questions displayed below.] Dowell Company produces a single product. Its...
[The following information applies to the questions displayed below.] Dowell Company produces a single product. Its income statements under absorption costing for its first two years of operation follow. 2016 2017 Sales ($46 per unit) $ 1,150,000 $ 2,070,000 Cost of goods sold ($31 per unit) 775,000 1,395,000 Gross margin 375,000 675,000 Selling and administrative expenses 301,250 346,250 Net income $ 73,750 $ 328,750 Additional Information Sales and production data for these first two years follow. 2016 2017 Units produced...
Dowell Company produces a single product. Its income statements under absorption costing for its first two...
Dowell Company produces a single product. Its income statements under absorption costing for its first two years of operation follow. 2018 2019 Sales ($46 per unit) $ 966,000 $ 1,886,000 Cost of goods sold ($31 per unit) 651,000 1,271,000 Gross margin 315,000 615,000 Selling and administrative expenses 287,000 327,000 Net income $ 28,000 $ 288,000 Additional Information Sales and production data for these first two years follow. 2018 2019 Units produced 31,000 31,000 Units sold 21,000 41,000 Variable cost per...
[The following information applies to the questions displayed below.] Dowell Company produces a single product. Its...
[The following information applies to the questions displayed below.] Dowell Company produces a single product. Its income statements under absorption costing for its first two years of operation follow. 2016 2017 Sales ($44 per unit) $ 968,000 $ 1,848,000 Cost of goods sold ($29 per unit) 638,000 1,218,000 Gross margin 330,000 630,000 Selling and administrative expenses 294,500 339,500 Net income $ 35,500 $ 290,500 Additional Information Sales and production data for these first two years follow. 2016 2017 Units produced...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT