Solved: Variable-absorption costing approach, Accounting Basics

Variable-absorption costing approach

Pinewood Company, which has only one product, has given the following data regarding its last month of operations:

Selling Price………………........................................………….$200
Units in beginning inventory………………………………0
Units produced…………………………………………………..5,000
Units sold…………………………………………………………..4,800
Units in ending inventory……………………………………400

Variable cost per unit:

    Direct materials………………………………………..$50
    Direct Labor……………………………………………..$25
    Variable Manufacturing Overhead……………..$5
    Variable Selling & Administrative………………$15

Fixed Costs:

Fixed Manufacturing Overhead…………………$90,000
Fixed Selling and Administrative……………….$35,000

Question 1: What is the total contribution margin for the month step by step under the variable costing approach?

Question 2: What is the total gross margin for the month step by step under the absorption costing approach?

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Accounting Basics: Variable-absorption costing approach

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Solution Preview :

Prepared by a verified Expert

Accounting Basics: Variable-absorption costing approach

Reference No:- TGS01737874

Have a Question? (oR Write a Review)

Recent Questions Asked Accounting Basics

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Solution Preview :

Prepared by a verified Expert

Accounting Basics: Variable-absorption costing approach

Reference No:- TGS01737874

Recent Questions Asked Accounting Basics

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