p19 8a tanck electric motors is a division of tanck electric products corporation 541940
*P19-8A Tanck Electric Motors is a division of Tanck Electric Products Corporation. The division manufactures and sells an electric motor used in a wide variety of applications. During the coming year it expects to sell 50,000 units for $30 per unit. Kerry Starr is the division manager. She is considering producing either 50,000 or 80,000 units during the period. Other information is presented in the schedule.
|
Division Information for 2012 Don't use plagiarized sources. Get Your Custom Essay on
p19 8a tanck electric motors is a division of tanck electric products corporation 541940
For $10/Page 0nly
|
|
|
Beginning inventory |
0 |
|
Expected sales in units |
50,000 |
|
Selling price per unit |
$30 |
|
Variable manufacturing costs per unit |
$12 |
|
Fixed manufacturing overhead costs (total) |
$400,000 |
|
Fixed manufacturing overhead costs per unit: |
$8 per unit ($400,000 + 50,000) |
|
Based on 50,000 units |
$5 per unit ($400,000 + 80,000) |
|
Based on 80,000 units |
|
|
Manufacturing cost per unit: |
|
|
Based on 50,000 units |
$ 20 per unit ($12 variable + $8 fixed) |
|
Based on 80,000 units |
$ 17 per unit ($12 variable + $5 fixed) |
|
Variable selling and administrative expenses |
$2 |
|
Fixed selling and administrative expenses (total) |
$40,000 |
Instructions
(a) Prepare an absorption costing income statement, with one column showing the results if 50,000 units are produced and one column showing the results if 80,000 units are produced.
(b) Prepare a variable costing income statement, with one column showing the results if 50,000 units are produced and one column showing the results if 80,000 units are produced.
(c) Reconcile the difference in net incomes under the two approaches and explain what accounts for this difference.
(d) Discuss the relative usefulness of the variable costing income statements versus the absorption costing income statements for decision making and for evaluating the manager’s performance.
Calculator
Our features
We've got everything to become your favourite writing service
Money back guarantee
Your money is safe. Even if we fail to satisfy your expectations, you can always request a refund and get your money back.
Confidentiality
We don’t share your private information with anyone. What happens on our website stays on our website.
Our service is legit
We provide you with a sample paper on the topic you need, and this kind of academic assistance is perfectly legitimate.
Get a plagiarism-free paper
We check every paper with our plagiarism-detection software, so you get a unique paper written for your particular purposes.
We can help with urgent tasks
Need a paper tomorrow? We can write it even while you’re sleeping. Place an order now and get your paper in 8 hours.
Pay a fair price
Our prices depend on urgency. If you want a cheap essay, place your order in advance. Our prices start from $11 per page.