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Linden Company manufactures and sells a single product Cost data for the product follow Variable costs per unit: Direct materials

Linden Company manufactures and sells a single product. Cost data for the product follow: Variable costs per unit: Direct materials. . . . . . . . . . . . . . . . . . . . . . . . . $ 6 Direct labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Variable factory overhead . . . . . . . . . . . . . . . . . 4 Variable selling and administrative . . . . . . . . . . 3 Total variable costs per unit . . . . . . . . . . . . . . . . . $25 Fixed costs per month: Fixed manufacturing overhead . . . . . . . . . . . . . $ 240,000 Fixed selling and administrative . . . . . . . . . . . . 180,000 Total fixed cost per month . . . . . . . . . . . . . . . . . . $420,000 The product sells for $40 per unit. Production and sales data for May and June, the first two months of operations, are as follows: Units Units Produced Sold May. . . . . . . . . . . 30,000 26,000 June . . . . . . . . . . 30,000 34,000 Income statements prepared by the Accounting Department, using absorption costing, are presented below:  Required: 1. Determine the unit product cost under: a. Absorption costing. b. Variable costing. 2. Prepare variable costing income statements for May and June using the contribution approach. 3. Reconcile the variable costing and absorption costing net operating income figures. 4. The company’s Accounting Department has determined the break-even point to be 28,000 u

Apr 25 2020 View more View Less

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