Question

Jordan Glass Company makes stained glass lamps. Each lamp that it sells for $316.30 per lamp...

Jordan Glass Company makes stained glass lamps. Each lamp that it sells for $316.30 per lamp requires $16.50 of direct materials and $70.80 of direct labor. Fixed overhead costs are expected to be $189,000 per year. Jordan Glass expects to sell 1,000 lamps during the coming year. Selling and administrative expenses were zero.

Required

a. Prepare income statements using absorption costing, assuming that Jordan Glass makes 1,000, 1,250, and 1,500 lamps during the year.

b. Prepare income statements using variable costing, assuming that Jordan Glass makes 1,000, 1,250, and 1,500 lamps during the year.

Homework Answers

Answer #1
a) INCOME STATEMENT (Absorption Costing)
Particulars 1000 lamps 1250 lamps 1500 lamps
Sales 1000*316.30=316300 1250*316.30=395375 1500*316.30=474450
Less: Material Cost 1000*16.50=16500 1250*16.50=20625 1500*16.50=24750
Less: Direct Labor 1000*70.80=70800 1250*70.80=88500 1500*70.80=106200
Less: Fixed Cost 1000*189=189000 1250*151.2=189000 1500*126=189000
Operating Profit 40000 97250 154500

b)

Income statement (Variable Costing)
PARTICULARS 1000 LAMPS 1250 LAMPS 1500 LAMPS
Sales 316300 395375 474450
Less: Marginal Cost of Sales
a) Material Cost 16500 20625 24750
b) Labor Cost 70800 88500 106200
contribution 229000 286250 343500
Fixed Cost 189000 189000 189000
Profit for the year 40000 97250 154500
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
Great Outdoze Company manufactures sleeping bags, which sell for $65.60 each. The variable costs of production...
Great Outdoze Company manufactures sleeping bags, which sell for $65.60 each. The variable costs of production are as follows: Direct material $ 19.60 Direct labor 10.20 Variable manufacturing overhead 6.90 Budgeted fixed overhead in 20x1 was $151,800 and budgeted production was 22,000 sleeping bags. The year’s actual production was 22,000 units, of which 18,400 were sold. Variable selling and administrative costs were $1.70 per unit sold; fixed selling and administrative costs were $27,000. Required: 1. Calculate the product cost per...
Denton Company manufactures and sells a single product. Cost data for the product are given: Variable...
Denton Company manufactures and sells a single product. Cost data for the product are given: Variable costs per unit: Direct materials $ 5 Direct labor 12 Variable manufacturing overhead 4 Variable selling and administrative 1 Total variable cost per unit $ 22 Fixed costs per month: Fixed manufacturing overhead $ 72,000 Fixed selling and administrative 175,000 Total fixed cost per month $ 247,000 The product sells for $51 per unit. Production and sales data for July and August, the first...
Denton Company manufactures and sells a single product. Cost data for the product are given: Variable...
Denton Company manufactures and sells a single product. Cost data for the product are given: Variable costs per unit: Direct materials $ 5 Direct labor 12 Variable manufacturing overhead 4 Variable selling and administrative 1 Total variable cost per unit $ 22 Fixed costs per month: Fixed manufacturing overhead $ 72,000 Fixed selling and administrative 175,000 Total fixed cost per month $ 247,000 The product sells for $51 per unit. Production and sales data for July and August, the first...
Walsh Company manufactures and sells one product. The following information pertains to each of the company’s...
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 $ 17 Variable manufacturing overhead $ 5 Variable selling and administrative $ 4 Fixed costs per year: Fixed manufacturing overhead $ 400,000 Fixed selling and administrative expenses $ 90,000 During its first year of operations, Walsh produced 50,000 units and sold 40,000 units. During its second year of...
Chuck Wagon Grills, Inc., makes a single product—a handmade specialty barbecue grill that it sells for...
Chuck Wagon Grills, Inc., makes a single product—a handmade specialty barbecue grill that it sells for $205. Data for last year’s operations follow: Units in beginning inventory 0 Units produced 10,300 Units sold 9,100 Units in ending inventory 1,200 Variable costs per unit: Direct materials $ 61 Direct labor 38 Variable manufacturing overhead 10 Variable selling and administrative 17 Total variable cost per unit $ 126 Fixed costs: Fixed manufacturing overhead $ 339,900 Fixed selling and administrative 510,000 Total fixed...
Chuck Wagon Grills, Inc., makes a single product—a handmade specialty barbecue grill that it sells for...
Chuck Wagon Grills, Inc., makes a single product—a handmade specialty barbecue grill that it sells for $205. Data for last year’s operations follow: Units in beginning inventory 0 Units produced 10,300 Units sold 9,400 Units in ending inventory 900 Variable costs per unit: Direct materials $ 60 Direct labor 34 Variable manufacturing overhead 13 Variable selling and administrative 19 Total variable cost per unit $ 126 Fixed costs: Fixed manufacturing overhead $ 298,700 Fixed selling and administrative 515,000 Total fixed...
Walsh Company manufactures and sells one product. The following information pertains to each of the company’s...
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 $ 26 Direct labor $ 14 Variable manufacturing overhead $ 4 Variable selling and administrative $ 3 Fixed costs per year: Fixed manufacturing overhead $ 320,000 Fixed selling and administrative expenses $ 90,000 During its first year of operations, Walsh produced 50,000 units and sold 40,000 units. During its second year of...
Walsh Company manufactures and sells one product. The following information pertains to each of the company’s...
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 $ 27 Direct labor $ 17 Variable manufacturing overhead $ 4 Variable selling and administrative $ 3 Fixed costs per year: Fixed manufacturing overhead $ 400,000 Fixed selling and administrative expenses $ 70,000 During its first year of operations, Walsh produced 50,000 units and sold 40,000 units. During its second year of...
Walsh Company manufactures and sells one product. The following information pertains to each of the company’s...
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 $ 23 Direct labor $ 17 Variable manufacturing overhead $ 2 Variable selling and administrative $ 1 Fixed costs per year: Fixed manufacturing overhead $ 400,000 Fixed selling and administrative expenses $ 80,000 During its first year of operations, Walsh produced 50,000 units and sold 40,000 units. During its second year of...
Walsh Company manufactures and sells one product. The following information pertains to each of the company’s...
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 $ 13 Variable manufacturing overhead $ 3 Variable selling and administrative $ 2 Fixed costs per year: Fixed manufacturing overhead $ 320,000 Fixed selling and administrative expenses $ 100,000 During its first year of operations, Walsh produced 50,000 units and sold 40,000 units. During its second year of...