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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.

  • one year ago
  • one year ago

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  1. sheg
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    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

    • one year ago
  2. GoldRush18
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    i have the format and all but its when i plug in the figures somethings wrong

    • one year ago
  3. sheg
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    Here sales revenue = 3800*$15 = $ 57,000

    • one year ago
  4. GoldRush18
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    i have that correct

    • one year ago
  5. GoldRush18
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    what would b the opening inventory figure?

    • one year ago
  6. sheg
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    opening stock is not mentioned so it would be zero

    • one year ago
  7. GoldRush18
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    thats what i have as well

    • one year ago
  8. sheg
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    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:

    • one year ago
  9. sheg
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    got it

    • one year ago
  10. GoldRush18
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    yea

    • one year ago
  11. sheg
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    now absorption cost is equal to

    • one year ago
  12. GoldRush18
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    8 right?

    • one year ago
  13. GoldRush18
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    its better when we take it step by step i understand it more

    • one year ago
  14. sheg
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    yeah

    • one year ago
  15. sheg
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    can u tell me how u calculate Absorption Cost

    • one year ago
  16. GoldRush18
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    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

    • one year ago
  17. sheg
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    good

    • one year ago
  18. GoldRush18
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    thanks

    • one year ago
  19. sheg
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    ABSORPTION COST = VARIABLE COST DIRECT LABOUR + DIRECT MATERIAL + DIRECT EXPENSE + VARIABLE OVERHEADS

    • one year ago
  20. GoldRush18
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    ?

    • one year ago
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