Question

Wyatt Corporation has just completed its first year of operations. Below are selected data: Number of...

Wyatt Corporation has just completed its first year of operations. Below are selected data:

Number of units produced 50,000 units    

Number of units sold   42,000 units   

Selling price per unit   $ 35.00   

Costs per unit:      

Direct materials   $ 3.00     

Direct labor    $ 5.00      

Variable overhead   $ 1.00      

Variable selling expenses $ 2.00   

Fixed expenses:       

Fixed overhead   $200,000      

Fixed selling expenses    $300,000

a.) Using the variable costing approach, calculate the operating income.

b.) Using the absorption costing approach, calculate the unit manufacturing cost?.

c.) Using the absorption costing approach, calculate the operating income?.

?

Homework Answers

Answer #1
a
Sales 1470000
Variabe costs:
Variable cost of goods sold 378000
Variable selling expenses 84000 462000
Contribution margin 1008000
Fixed expenses:
Fixed overhead 200000
Fixed selling expenses 300000 500000
Operating income 508000
b
Direct materials    3
Direct labor 5
Variable overhead 1
Fixed overhead 4 =200000/50000
Unit manufacturing cost 13
c
Sales 1470000
Cost of goods sold 546000 =42000*13
Gross margin 924000
Selling expenses 384000
Operating income 540000
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