Prepare income statements under variable and absorption cost

Assignment Help Financial Accounting

Reference no: EM131810373

The Gable Company manufactures? trendy, high-quality moderately priced watches. As Gable?'s senior financial? analyst, you are asked to recommend a method of inventory costing.

The CFO will use your recommendation to prepare Gable?'s 2014 income statement. The following data are for the year ended December? 31,2014?:

Beginning inventory, January 1, 2014: 90,000 units

Ending inventory, December 31, 2014: 32,000 units

2014 sales: 429,000 units

Selling price (to distributor): $21.00 per unit

Variable manufacturing cost per unit, including direct materials: $5.20 per unit

Variable operating (marketing) cost per unit sold: $1.00 per unit sold

Fixed manufacturing costs: $1,766,400

Denominator-level machine-hours: 6,400

Standard production rate 60units per machine-hour

Fixed operating (marketing) costs: $1,050,000

1. Prepare income statements under variable and absorption costing for the year ended December? 31, 2014.

2. What is Gable?'s operating income as percentage of revenues under each costing? method?

Reference no: EM131810373

Questions Cloud

How much gain is recognized by walter on the sale of house : How much gain is recognized by Walter on the sale of the house? What is the basis of the new house purchased by Walter?

What will the unit sold contribute to profit : At a break-even point of 430 units sold, variable expenses were $5,160 and fixed expenses were $2,580. What will the 431st unit sold contribute to profit

Determining the incremental tax bracket : You may assume that this sales engineer is in the 28% incremental tax bracket. Use MACRS depreciation.

Explain what is the realized gain or loss on the building : Betty exchanges an apartment building and boot. Explain what is the realized gain or loss on the building? What is the recognized gain or loss on the building?

Prepare income statements under variable and absorption cost : Prepare income statements under variable and absorption costing for the year ended December? 31, 2014.

Purchase of a new piece of equipment : A large profitable company, in the 40% combined federal/state tax bracket,is considering the purchase of a new piece of equipment that will yield benefits

Determining the federal taxable income : The bonds may be purchased now for $1000. The income from corporation bonds must be included in federal taxable income.

What are the expected duplicating department costs for june : Data from the duplicating department of Fastcopy Ltd. What are the expected duplicating department costs for June if 19,000 copies are expected to be made?

Journalize the entries to record the following transactions : Journalize the entries to record the following selected transactions for the current year. Refer to the Chart of Accounts for exact wording of account titles.

User Account

All Pages