GoldRush18
  • GoldRush18
Philmore Corp. produces a single product. The following is a cost structure applied to its first year of operations, 2005: Sales Price- $15 per unit Variable Costs: Selling expenses $2 er unit Manufacturing $4 per unit Fixed costs(total incurred for the year): Selling expenses $14 000 Manufacturing $20 000 During 2005, Philmore Corp. manufactured 5 000 units and sold 3 800. There was no beginning or ending work-in-process inventory. Prepare the income statement using the absorption costing format. Prepare the income statement using the variable costing format.
Finance
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katieb
  • katieb
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anonymous
  • anonymous
ABSORPTION COSTING PRO-FORMA $ $ Sales Revenue xxxxx Less Absorption Cost of Sales Opening Stock (Valued @ absorption cost) xxxx Add Production Cost (Valued @ absorption cost) xxxx Total Production Cost xxxx Less Closing Stock (Valued @ absorption cost) (xxx) Absorption Cost of Production xxxx Add Selling, Admin & Distribution Cost xxxx Absorption Cost of Sales (xxxx) Un-Adjusted Profit xxxxx Fixed Production O/H absorbed xxxx Fixed Production O/H incurred (xxxx) (Under)/Over Absorption xxxxx Adjusted Profit xxxxx
GoldRush18
  • GoldRush18
i have the format and all but its when i plug in the figures somethings wrong
anonymous
  • anonymous
Here sales revenue = 3800*$15 = $ 57,000

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GoldRush18
  • GoldRush18
i have that correct
GoldRush18
  • GoldRush18
what would b the opening inventory figure?
anonymous
  • anonymous
opening stock is not mentioned so it would be zero
GoldRush18
  • GoldRush18
thats what i have as well
anonymous
  • anonymous
that is correct read this statement carefully Philmore Corp. produces a single product. The following is a cost structure applied to its first year of operations, 2005:
anonymous
  • anonymous
got it
GoldRush18
  • GoldRush18
yea
anonymous
  • anonymous
now absorption cost is equal to
GoldRush18
  • GoldRush18
8 right?
GoldRush18
  • GoldRush18
its better when we take it step by step i understand it more
anonymous
  • anonymous
yeah
anonymous
  • anonymous
can u tell me how u calculate Absorption Cost
GoldRush18
  • GoldRush18
Unit Production Cost Absorption Costing Method $ Direct material 0 Direct labour 0 Variable manufacturing overhead 4 Total variable production 4 Fixed manufacturing over head 4 unit product cost 8
anonymous
  • anonymous
good
GoldRush18
  • GoldRush18
thanks
anonymous
  • anonymous
ABSORPTION COST = VARIABLE COST DIRECT LABOUR + DIRECT MATERIAL + DIRECT EXPENSE + VARIABLE OVERHEADS
GoldRush18
  • GoldRush18
?

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