Question

Abbott Replica produces a specialty statue for sale to collectors. In 2017​, Abbott​'s expected and actual output was 10,000 statues. Abbott sold

7,000 statues at an average selling price of $330.Other information for Abbott for 2017 is given​ below:

Direct materials $87.00 per unit

Variable manufacturing costs $45.00 per unit

Fixed manufacturing costs $68.00 per unit

Variable administrative costs $35.00 per unit

Calculate Abbott ​Replica's cost per statue under​ (a) absorption​ costing, (b) variable​ costing, and​ (c) throughput costing. What is Abbott​'s

throughput margin for 2017​?

Answer 1

Calculation cost per statue

1	Using absorption costing
	Cost per statue	Amount($)
	Direct material	87
	Variable manufacturing cost	45
	Fixed manufacturing cost	68
	Total cost per statue	200
2	Using variable costing
	Cost per statue	Amount($)
	Direct material	87
	Variable manufacturing cost	45
	Total cost per statue	132
3	Throughput costing
	Cost per statue	Amount($)
	Direct material	87
	Total cost per statue	87

Calculation margin under throughput coasting

Sale(7000*330)		2310000
Less: cost of production
Direct material (87*10000)	870000
Less: ending inventory (87*3000)	261000	609000
Margin		1701000