5. Direct and absorption costing
The information that follows pertains to XYZ Products for the year ended December 31, 20X8.
| Inventory, 1/1/X8 | 24,000 units |
| Units manufactured | 80,000 |
| Units sold | 104,000 |
| Inventory, 12/31/X8 | 23000 units |
| Manufacturing costs: | |
| Direct materials | $4 per unit |
| Direct labor | $5 per unit |
| Variable factory overhead | $9 per unit |
| Fixed factory overhead | $300,000 |
| Selling & administrative expenses: | |
| Variable | $2 per unit |
| Fixed | $136,000 |
| 1.Direct costing. | |
| Direct materials | $4.00 |
| Direct labor | $5.00 |
| Variable factory overhead | $9.00 |
| Unit cost | $18.00 |
| 2.Absorption costing. | |
| Direct materials | 4.00 |
| Direct labor | 5.00 |
| Variable factory overhead | 9.00 |
| Fixed factory overhead | 1.70 |
| ($136000/80000) | $20.50 |
| Assuming a unit cost of $26 per |
The unit selling price is $26. Assume that costs have been stable in recent years.
Homework
a. Prepare an income statement for the year ended December 31, 20X8, by using direct costing.
b. Prepare an income statement for the year ended December 31, 20X8, by using absorption costing.
Economic Debate- Progressive Income Tax For this Economic Debate, we are going to discuss the…
TOPIC: Going Global Discussion Thread 1 (initial post due Wednesday for full credit) Please note:…
Assignment Topic This week will culminate in the creation of a narrated PowerPoint to create…
The Assignment must be submitted on Blackboard (WORD format only) via allocated folder. Assignments submitted…
you need to post your 2-page information flier to share with your Final Project Group.…
discussion: Discuss the methods used at your company to measure and ensure quality products and…