Scribd
Upload
187 views

Problem Solving: Name: Renion, Gabriela M. Date: Score: Quiz N

The document provides income statements for June Company under absorption costing, variable costing, and throughput costing for the year ending December 31, 201A. Under absorption costing, net income is ₱804,000. Under variable costing, net income is ₱780,000. The difference of ₱24,000 is equal to the fixed manufacturing overhead in ending inventory. Under throughput costing, net income is ₱700,000. Throughput margin is calculated as sales less direct materials costs.

Uploaded by

Goose Chan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
187 views

Problem Solving: Name: Renion, Gabriela M. Date: Score: Quiz N

The document provides income statements for June Company under absorption costing, variable costing, and throughput costing for the year ending December 31, 201A. Under absorption costing, net income is ₱804,000. Under variable costing, net income is ₱780,000. The difference of ₱24,000 is equal to the fixed manufacturing overhead in ending inventory. Under throughput costing, net income is ₱700,000. Throughput margin is calculated as sales less direct materials costs.

Uploaded by

Goose Chan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 3

BM2021

NAME: RENION, GABRIELA M. DATE: SCORE:

QUIZ

Problem Solving n
Read and analyze the following problem. Write your answer at the back of this paper. Show your
computations. (3 items x 10 points)

June Company’s actual data for 201A are given as follows:

Units produced 25,000


Units sold 24,000

Selling price per unit P200


Direct material costs 30
Direct labor 20
Variable manufacturing overhead 60
Variable selling costs 20

Fixed manufacturing costs P600,000


Fixed administrative costs 300,000

Required:
Prepare an income statement under (1) absorption costing, (2) variable costing, and (3) throughput
costing.

Units Produced 25,000


Less: Units Sold 24,000
Units Unsold 1,000

Direct Material Costs P 30.00


Direct Labor 20.00
Variable Manufacturing Overhead 60.00
Variable Manufacturing Costs P 110.00

Fixed Manufacturing Costs P 600,000.00


Divided by: Units Produced 25,000
Total P 24.00
Add: Variable Manufacturing Costs P 110.00
Cost of Goods Sold per unit P 134.00
Units sold 24,000
Cost of Goods Sold P 3,216,000.00

07 Quiz 1 *Property
of STI
BM2021

NAME: RENION, GABRIELA M. DATE: SCORE:

June Company
Income Statement (Absorption Costing)
December 31, 201A

Sales (24,000 x P200) ₱ 4,800,000.00


Less: Cost of Goods Sold (24,000 x P134) 3,216,000.00
Gross Profit ₱ 1,584,000.00
Less: Selling and Administrative Expenses
Variable Selling (24,000 x P 20) ₱ 480,000.00
Fixed administrative 300,000.00 780,000.00
Net Income ₱ 804,000.00

The cost of goods sold by P 134 per unit is computed as the sum of variable and fixed manufacturing
costs per unit [P 110 + (P600,000/25,000)]. The cost of ending inventory will be P 134,000.00 (P 134 x
1,000 units unsold).

June Company
Income Statement (Variable Costing)
December 31, 201A

Sales (24,000 x P 200) ₱ 4,800,000.00


Less: Variable Costs
Cost of Goods Sold (24,000 x P 110) ₱ 2,640,000.00
Sellings Costs (24,000 x P 20) 480,000.00 3,120,000.00
Contribution Margin ₱ 1,680,000.00
Less: Fixed Costs
Manufacturing Costs 600,000.00
Administrative Costs 300,000.00 900,000.00
Net Income ₱ 780,000.00

The income statement under variable costing separates variable costs and fixed costs and shows a
contribution margin instead of a gross profit, as shown under absorption costing. The cost of ending
inventory under variable costing is P 110,000 (P 110 x 1000 units unsold).
07 Quiz 1 *Property
of STI
BM2021

NAME: RENION, GABRIELA M. DATE: SCORE:

As shown in the two (2) income statements, the difference between the net income of the two (2)
methods is P 24,000. This is also the difference between ending inventory costs and the fixed
manufacturing overhead in ending inventory of P 24,000 (P24 x 1,000).

Net Income (Absorption Costing P 804,000.00


Net Income (Variable Costing) (780,000.00)
Difference Between the Net Income P 24,000.00

June Company
Income Statement (Throughput Costing)
December 31, 201A

Sales (24,000 x P 200) ₱ 4,800,000.00


Less: Direct Materials (24,000 x P30) 720,000.00
Throughput Margin ₱ 4,080,000.00
Less:
Variable Manufacturing Costs (25,000 x P 80) ₱ 2,000,000.00
Variable Selling Expenses (24,000 x P 20) 480,000.00
Fixed Manufacturing Costs 600,000.00
Fixed Administrative Expenses 300,000.00 ₱ 3,380,000.00
Net Income ₱ 700,000.00

07 Quiz 1 *Property
of STI

You might also like