Question
Rustys Granite Counter Tops is a fabricator of fine bathroom granite counter tops and sink assemblies....
Rustys Granite Counter Tops is a fabricator of fine bathroom granite counter tops and sink assemblies. Rusty's uses one species of granite and one model of sink to stabilize production processes and reduce costs. Rusty's offers its counter-top and sink assemblies in 48, 60 and 72 inch sizes. Information related to Rusty's most popular 60 inch counter top is provided below. Rusty had no beginning finished goods inventory of this item.
Production in units: 3,000 counter top units
Sales in Units: 2,8000 counter top units
Unit selling price: $300 per counter-top unit
Direct Labor Hours Used: 3,600 Hours
Manufacturing Costs:
Direct Materials: $360,000
Direct Labor: $72,000
Variable Manufacturing Overhead: $18,000
Fixed Manufacturing Overhead: $180,000
Non-Manufacturing Costs:
Variable Selling Expenses: $45,000
Fixed Selling Expenses: $120,000
1.) Determine the actual variable product cost of one counter-top unit
2.)Determine the total cost of ending finished goods inventory using absorption costing
3.) Determine the difference in income under variable versus absorption costing for Rusty's Granite Counter Tops. Indicate which method will report higher income if it is different.
Homework Answers
Answer #1
The answer has been presented in the supporting sheets. All the parts has been solved with detailed explanation and formulas. For first part variable product cost per unit has been calculated. For second part total cost of closing inventory has been calculated. For third part detailed calculation has been presented in the supporting sheets and absorption costing report higher net income. For detailed answers refer to the supporting sheets.
Not the answer you're looking for?
Similar Questions
#7 Inventory Valuation under Absorption Costing and Variable Costing At the end of the first year...
#7
Inventory Valuation under Absorption Costing and Variable
Costing
At the end of the first year of operations, 5,000 units remained
in the finished goods inventory. The unit manufacturing costs
during the year were as follows:
Direct materials
$29.80
Direct labor
17.20
Fixed factory overhead
5.60
Variable factory overhead
4.90
Determine the cost of the finished goods inventory reported on
the balance sheet under (a) the absorption costing concept and (b)
the variable costing concept.
Absorption costing
$
Variable costing...
#7 Inventory Valuation under Absorption Costing and Variable Costing At the end of the first year...
#7
Inventory Valuation under Absorption Costing and Variable
Costing
At the end of the first year of operations, 5,000 units remained
in the finished goods inventory. The unit manufacturing costs
during the year were as follows:
Direct materials
$29.80
Direct labor
17.20
Fixed factory overhead
5.60
Variable factory overhead
4.90
Determine the cost of the finished goods inventory reported on
the balance sheet under (a) the absorption costing concept and (b)
the variable costing concept.
Absorption costing
$
Variable costing...
Inventory Valuation under Absorption Costing and Variable Costing At the end of the first year of...
Inventory Valuation under Absorption Costing and Variable
Costing
At the end of the first year of operations, 4,800 units remained
in the finished goods inventory. The unit manufacturing costs
during the year were as follows:
Direct materials
$33.80
Direct labor
20.30
Fixed factory overhead
6.90
Variable factory overhead
6.10
Determine the cost of the finished goods inventory reported on
the balance sheet under (a) the absorption costing concept and (b)
the variable costing concept.
Absorption costing
$
Variable costing
$
nventory Valuation under Absorption Costing and Variable Costing At the end of the first year of...
nventory Valuation under Absorption Costing and Variable
Costing
At the end of the first year of operations, 4,800 units remained
in the finished goods inventory. The unit manufacturing costs
during the year were as follows:
Direct materials
$36.90
Direct labor
20.70
Fixed factory overhead
6.90
Variable factory overhead
6.10
Determine the cost of the finished goods inventory reported on
the balance sheet under (a) the absorption costing concept and (b)
the variable costing concept.
Absorption costing
$
Variable costing
$
nventory Valuation under Absorption Costing and Variable Costing At the end of the first year of...
nventory Valuation under Absorption Costing and Variable
Costing
At the end of the first year of operations, 6,400 units remained
in the finished goods inventory. The unit manufacturing costs
during the year were as follows:
Direct materials
$41.40
Direct labor
19.40
Fixed factory overhead
6.20
Variable factory overhead
5.50
Determine the cost of the finished goods inventory reported on
the balance sheet under (a) the absorption costing concept and (b)
the variable costing concept.
Absorption costing
$
Variable costing
$
At the end of the first year of operations, 6,500 units remained in the finished goods...
At the end of the first year of operations, 6,500 units remained
in the finished goods inventory. The unit manufacturing costs
during the year were as follows: Direct materials $33.00 Direct
labor 18.60 Fixed factory overhead 5.60 Variable factory overhead
4.90 Determine the cost of the finished goods inventory reported on
the balance sheet under (a) the absorption costing concept and (b)
the variable costing concept. Absorption costing $ Variable costing
$
At the end of the first year of operations, 23,200 units remained in the finished goods...
At the end of the
first year of operations, 23,200 units remained in the finished
goods inventory. The unit manufacturing costs during the year were
as follows:
Determine the cost of
the finished goods inventory reported on the balance sheet under
(a) the absorption costing concept and (b) the variable costing
concept.
a. Cost of the finished goods inventory under the absorption
costing:
$
b. Cost of the finished goods inventory under the variable
costing:
$
Direct materials
$24
Direct...
Inventory valuation under absorption costing and variable costing At the end of the first year of...
Inventory valuation under absorption costing and variable
costing
At the end of the first year of operations, 20,800 units
remained in the finished goods inventory. The unit manufacturing
costs during the year were as follows:
Direct materials
$34
Direct labor
13
Fixed factory overhead
20
Variable factory overhead
7
Determine the cost of the finished goods inventory reported on
the balance sheet under (a) the absorption costing concept and (b)
the variable costing concept.
a. Cost of the finished goods...
Inventory Valuation under Absorption Costing and Variable Costing At the end of the first year of...
Inventory Valuation under Absorption Costing and Variable
Costing
At the end of the first year of operations, 5,100 units remained
in the finished goods inventory. The unit manufacturing costs
during the year were as follows:
Direct materials
$40.90
Direct labor
15.10
Fixed factory overhead
7.00
Variable factory overhead
6.20
Determine the cost of the finished goods inventory reported on
the balance sheet under (a) the absorption costing concept and (b)
the variable costing concept.
Inventory Valuation under Absorption Costing and Variable Costing At the end of the first year of...
Inventory Valuation under Absorption Costing and Variable
Costing
At the end of the first year of operations, 4,900 units remained
in the finished goods inventory. The unit manufacturing costs
during the year were as follows:
Direct materials
$35.80
Direct labor
18.90
Fixed factory overhead
5.70
Variable factory
overhead
5.00
Determine the cost of the finished goods inventory reported on
the balance sheet under (a) the absorption costing concept and (b)
the variable costing concept.
Absorption costing
$fill in the blank...
ADVERTISEMENT
Need Online Homework Help?
Get Answers For Free
Most questions answered within 1 hours.
ADVERTISEMENT
Active Questions
asked 34 minutes ago
asked 40 minutes ago
asked 43 minutes ago
asked 48 minutes ago
asked 57 minutes ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago