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Cool Car Motors assembles and sells motor vehicles and uses standard costing. Actual data relating to April and May 2018 are provided. (Click to view the data.) The selling price per vehicle is $28,000. The budgeted level of production used to calculate the budgeted fixed manufacturing cost per unit is 500 units. There are no price, efficiency, or rate variances. Any production-volume variance is written off to COGS in the month in which occurs. Required 1. Prepare April and May 2018 statements of comprehensive income for Cool Car Motors under (a) variable costing and (b) absorption costing. 2. Prepare a numerical reconciliation and explanation of the difference between operating income for each month under variable costing and absorption costing. Requirement 1a. Prepare April and May 2018 statements of comprehensive income for Cool Car Motors under variable costing. Complete the top half of the statement of comprehensive income for each month first, and then complete the bottom portion. (Enter a "0" for any zero balance accounts.) April 2018 May 2018 Less: Data Unit data: Beginning inventory Production Sales Variable costs: Manufacturing cost per unit produced $ Operating (marketing) cost per unit sold Fixed costs: Manufacturing costs Operating (marketing) costs Print April 0 Done 500 400 10,000 $ 3,200 May 100 425 475 10,000 3,200 $ 2,250,000 $2,250,000 675,000 675,000 - X

Cool Car Motors assembles and sells motor vehicles and uses standard costing. Actual data relating to April and May 2018 are provided. (Click to view the data.) The selling price per vehicle is $28,000. The budgeted level of production used to calculate the budgeted fixed manufacturing cost per unit is 500 units. There are no price, efficiency, or rate variances. Any production-volume variance is written off to COGS in the month in which occurs. Required 1. Prepare April and May 2018 statements of comprehensive income for Cool Car Motors under (a) variable costing and (b) absorption costing. 2. Prepare a numerical reconciliation and explanation of the difference between operating income for each month under variable costing and absorption costing. Requirement 1a. Prepare April and May 2018 statements of comprehensive income for Cool Car Motors under variable costing. Complete the top half of the statement of comprehensive income for each month first, and then complete the bottom portion. (Enter a "0" for any zero balance accounts.) April 2018 May 2018 Less: Data Unit data: Beginning inventory Production Sales Variable costs: Manufacturing cost per unit produced $ Operating (marketing) cost per unit sold Fixed costs: Manufacturing costs Operating (marketing) costs Print April 0 Done 500 400 10,000 $ 3,200 May 100 425 475 10,000 3,200 $ 2,250,000 $2,250,000 675,000 675,000 - X

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter18: Pricing And Profitability Analysis
Section: Chapter Questions
Problem 15E: Flaherty, Inc., has just completed its first year of operations. The unit costs on a normal costing...
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Cool Car Motors assembles and sells motor vehicles and uses standard costing. Actual data relating to April and May 2018 are provided. (Click to view the data.) The selling price per vehicle is $28,000. The budgeted level of production used to calculate the budgeted fixed manufacturing cost per unit is 500 units. There are no price, efficiency, or rate variances. Any production-volume variance is written off to COGS in the month in which it occurs. Required 1. Prepare April and May 2018 statements of comprehensive income for Cool Car Motors under (a) variable costing and (b) absorption costing. 2. Prepare a numerical reconciliation and explanation of the difference between operating income for each month under variable costing and absorption costing. Requirement 1a. Prepare April and May 2018 statements of comprehensive income for Cool Car Motors under variable costing. Complete the top half of the statement of comprehensive income for each month first, and then complete the bottom portion. (Enter a "0" for any zero balance accounts.) May 2018 April 2018 Less: C 00 Data Unit data: Beginning inventory Production Sales Variable costs: Manufacturing cost per unit produced Operating (marketing) cost per unit sold Fixed costs: Manufacturing costs Operating (marketing) costs Print $ April 0 500 400 Done 10,000 $ 3,200 May 100 425 475 10,000 3,200 $ 2,250,000 $ 2,250,000 675,000 675,000 - X
Transcribed Image Text:Cool Car Motors assembles and sells motor vehicles and uses standard costing. Actual data relating to April and May 2018 are provided. (Click to view the data.) The selling price per vehicle is $28,000. The budgeted level of production used to calculate the budgeted fixed manufacturing cost per unit is 500 units. There are no price, efficiency, or rate variances. Any production-volume variance is written off to COGS in the month in which it occurs. Required 1. Prepare April and May 2018 statements of comprehensive income for Cool Car Motors under (a) variable costing and (b) absorption costing. 2. Prepare a numerical reconciliation and explanation of the difference between operating income for each month under variable costing and absorption costing. Requirement 1a. Prepare April and May 2018 statements of comprehensive income for Cool Car Motors under variable costing. Complete the top half of the statement of comprehensive income for each month first, and then complete the bottom portion. (Enter a "0" for any zero balance accounts.) May 2018 April 2018 Less: C 00 Data Unit data: Beginning inventory Production Sales Variable costs: Manufacturing cost per unit produced Operating (marketing) cost per unit sold Fixed costs: Manufacturing costs Operating (marketing) costs Print $ April 0 500 400 Done 10,000 $ 3,200 May 100 425 475 10,000 3,200 $ 2,250,000 $ 2,250,000 675,000 675,000 - X
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