{"id":13786,"date":"2021-11-05T07:39:53","date_gmt":"2021-11-05T07:39:53","guid":{"rendered":"https:\/\/assignmenttutors.net\/blog\/exercise-8-7-variable-and-absorption-costing-unit-product-costs\/"},"modified":"2021-11-05T07:39:53","modified_gmt":"2021-11-05T07:39:53","slug":"exercise-8-7-variable-and-absorption-costing-unit-product-costs","status":"publish","type":"post","link":"https:\/\/assignmenttutors.net\/blog\/exercise-8-7-variable-and-absorption-costing-unit-product-costs\/","title":{"rendered":"Exercise 8-7 variable and absorption costing unit product costs;"},"content":{"rendered":"<div>\n<p><span>Exercise 8-7 Variable and Absorption Costing Unit Product Costs; Income Statements [LO1, LO2]<\/span><\/p>\n<table width=\"775\" border=\"0\">\n<tbody>\n<tr>\n<td width=\"100%\">\n<p><span>Baxtell Company manufactures and sells a single product. The following costs were incurred during the company\u2019s first year of operations:<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><span>\u00a0<\/span><\/p>\n<table width=\"775\" border=\"0\">\n<tbody>\n<tr>\n<td>\n<p><span>\u00a0<\/span><\/p>\n<\/td>\n<td colspan=\"3\">\n<p><span>\u00a0<\/span><\/p>\n<\/td>\n<td width=\"43%\">\n<p>\u00a0<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td width=\"45%\">\n<p><span>\u00a0\u00a0Variable costs per unit:<\/span><\/p>\n<\/td>\n<td width=\"1%\">\n<p><span>\u00a0<\/span><\/p>\n<\/td>\n<td width=\"8%\">\n<p><span>\u00a0<\/span><\/p>\n<\/td>\n<td width=\"1%\">\n<p><span>\u00a0<\/span><\/p>\n<\/td>\n<td width=\"43%\">\n<p>\u00a0<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p><span>\u00a0\u00a0\u00a0\u00a0\u00a0Manufacturing:<\/span><\/p>\n<\/td>\n<td>\n<p><span>\u00a0<\/span><\/p>\n<\/td>\n<td>\n<p><span>\u00a0<\/span><\/p>\n<\/td>\n<td>\n<p><span>\u00a0<\/span><\/p>\n<\/td>\n<td width=\"43%\">\n<p>\u00a0<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p><span>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Direct materials<\/span><\/p>\n<\/td>\n<td>\n<p><span>$<\/span><\/p>\n<\/td>\n<td>\n<p><span>39<\/span><\/p>\n<\/td>\n<td>\n<p><span>\u00a0<\/span><\/p>\n<\/td>\n<td width=\"43%\">\n<p>\u00a0<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p><span>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Direct labour<\/span><\/p>\n<\/td>\n<td>\n<p><span>\u00a0<\/span><\/p>\n<\/td>\n<td>\n<p><span>21<\/span><\/p>\n<\/td>\n<td>\n<p><span>\u00a0<\/span><\/p>\n<\/td>\n<td width=\"43%\">\n<p>\u00a0<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p><span>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Variable manufacturing overhead<\/span><\/p>\n<\/td>\n<td>\n<p><span>\u00a0<\/span><\/p>\n<\/td>\n<td>\n<p><span>3<\/span><\/p>\n<\/td>\n<td>\n<p><span>\u00a0<\/span><\/p>\n<\/td>\n<td width=\"43%\">\n<p>\u00a0<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p><span>\u00a0\u00a0\u00a0\u00a0\u00a0Variable selling and administrative<\/span><\/p>\n<\/td>\n<td>\n<p><span>\u00a0<\/span><\/p>\n<\/td>\n<td>\n<p><span>6<\/span><\/p>\n<\/td>\n<td>\n<p><span>\u00a0<\/span><\/p>\n<\/td>\n<td width=\"43%\">\n<p>\u00a0<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p><span>\u00a0\u00a0Fixed costs per year:<\/span><\/p>\n<\/td>\n<td>\n<p><span>\u00a0<\/span><\/p>\n<\/td>\n<td>\n<p><span>\u00a0<\/span><\/p>\n<\/td>\n<td>\n<p><span>\u00a0<\/span><\/p>\n<\/td>\n<td width=\"43%\">\n<p>\u00a0<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p><span>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Fixed manufacturing overhead<\/span><\/p>\n<\/td>\n<td>\n<p><span>\u00a0<\/span><\/p>\n<\/td>\n<td>\n<p><span>302,500<\/span><\/p>\n<\/td>\n<td>\n<p><span>\u00a0<\/span><\/p>\n<\/td>\n<td width=\"43%\">\n<p>\u00a0<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td>\n<p><span>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Fixed selling and administrative expense<\/span><\/p>\n<\/td>\n<td>\n<p><span>\u00a0<\/span><\/p>\n<\/td>\n<td>\n<p><span>177,800<\/span><\/p>\n<\/td>\n<td>\n<p><span>\u00a0<\/span><\/p>\n<\/td>\n<td width=\"43%\">\n<p>\u00a0<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td colspan=\"4\"\/>\n<td width=\"43%\">\n<p>\u00a0<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td colspan=\"5\" width=\"100%\">\n<p><span>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0During the year, the company produced 30,250 units and sold 25,400 units. The selling price of the company\u2019s product is $90 per unit.<\/span><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td colspan=\"5\" width=\"100%\">\n<p><span>\u00a0<strong><em>Required:<\/em><\/strong><\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><span>\u00a0<\/span><\/p>\n<table width=\"800\" border=\"0\">\n<tbody>\n<tr>\n<td width=\"2%\">\n<p><strong><span>1.<\/span><\/strong><\/p>\n<\/td>\n<td colspan=\"3\" valign=\"top\" width=\"93%\">\n<p><span>Assume that the company uses absorption costing.<\/span><\/p>\n<\/td>\n<td width=\"3%\">\n<p>\u00a0<\/p>\n<\/td>\n<\/tr>\n<tr>\n<td colspan=\"2\" width=\"3%\">\n<p>\u00a0<\/p>\n<\/td>\n<td width=\"2%\">\n<p><span>\u00a0<strong><em>a.<\/em><\/strong><\/span><\/p>\n<\/td>\n<td colspan=\"2\" valign=\"top\" width=\"93%\">\n<p><span>Compute the unit product cost.<\/span><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td colspan=\"2\" width=\"3%\">\n<p>\u00a0<\/p>\n<\/td>\n<td width=\"2%\">\u00a0<\/td>\n<td colspan=\"2\" valign=\"top\" width=\"93%\">\n<p><span>\u00a0<\/span><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td width=\"23\">\u00a0<\/td>\n<td width=\"2\">\u00a0<\/td>\n<td width=\"23\">\u00a0<\/td>\n<td width=\"727\">\u00a0<\/td>\n<td width=\"25\">\u00a0<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><span>\u00a0 \u00a0\u00a0\u00a0 <\/span><\/p>\n<table width=\"775\" border=\"0\">\n<tbody>\n<tr>\n<td valign=\"top\" width=\"3%\">\n<p><strong><em><span>b.<\/span><\/em><\/strong><\/p>\n<\/td>\n<td valign=\"top\" width=\"97%\">\n<p><span>Prepare an income statement for the year.<\/span><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td valign=\"top\" width=\"3%\">\n<p><span>\u00a0<\/span><\/p>\n<\/td>\n<td valign=\"top\" width=\"97%\">\n<p><span>\u00a0<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><span>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/p>\n<table width=\"775\" border=\"0\">\n<tbody>\n<tr>\n<td width=\"3%\">\n<p><strong><span>2.<\/span><\/strong><\/p>\n<\/td>\n<td valign=\"top\" width=\"97%\">\n<p><span>Assume that the company uses variable costing.<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><span>\u00a0<\/span><\/p>\n<table width=\"775\" border=\"0\">\n<tbody>\n<tr>\n<td width=\"3%\">\n<p><strong><em><span>a.<\/span><\/em><\/strong><\/p>\n<\/td>\n<td valign=\"top\" width=\"97%\">\n<p><span>Compute the unit product cost.<\/span><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td width=\"3%\">\n<p><span>\u00a0<\/span><\/p>\n<\/td>\n<td valign=\"top\" width=\"97%\">\n<p><span>\u00a0<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><span>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u00a0\u00a0\u00a0\u00a0 <\/span><\/p>\n<p>\u00a0<\/p>\n<table width=\"775\" border=\"0\">\n<tbody>\n<tr>\n<td valign=\"top\" width=\"3%\">\n<p><strong><em><span>b.<\/span><\/em><\/strong><\/p>\n<\/td>\n<td valign=\"top\" width=\"97%\">\n<p><span>Prepare an income statement for the year.<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Exercise 8-7 Variable and Absorption Costing Unit Product Costs; Income Statements [LO1, LO2] Baxtell Company manufactures and sells a single product. The following costs were incurred during the company\u2019s first year of operations: \u00a0 \u00a0 \u00a0 \u00a0 \u00a0\u00a0Variable costs per unit: \u00a0 \u00a0 \u00a0 \u00a0 \u00a0\u00a0\u00a0\u00a0\u00a0Manufacturing: \u00a0 \u00a0 \u00a0 \u00a0 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Direct materials $ 39 \u00a0 [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[31],"tags":[],"class_list":["post-13786","post","type-post","status-publish","format-standard","hentry","category-homework-help"],"_links":{"self":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts\/13786","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/comments?post=13786"}],"version-history":[{"count":0,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts\/13786\/revisions"}],"wp:attachment":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/media?parent=13786"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/categories?post=13786"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/tags?post=13786"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}