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Mark's Meals produces frozen meals, which it sells for $9 each. The company uses the FIFO inventory costing method, and it computes a new monthly foxed manufacturing overhead rate based on the actual number of meals produced that month. All costs and production levels are exactly as planned. The following data are from the company's first two months in business: (Click the icon to view the data.) Read the requirements. Requirement 1. Compute the product cost per meal produced under absorption costing and under variable costing. Do this first for January and then for February February January Less: Total product cost 70 1 all Requirement 2a. Prepare separate monthly income statements for January and for February, using absorption costing Less Absorption Variable costing costing Less Absorption Variable costing costing Less Mark's Meals Income Statement (Absorption Costing) Month Ended January 31 Requirement 2b. Prepare Mark's Meals' January and February income statements using variable costing Mark's Meals Contribution Margin Income Statement (Variable Costing) Month Ended February 28 January 31 February 28 Data table Sales...... Production.. Variable manufacturing expense per meal. Sales commission expense per meal........ January February 1,600 meals 1.800 meals 2,000 meals 1,600 meals Print Total fixed manufacturing overhead......... $800 Total fixed marketing and administrative expenses.. $600 $3 $1 Done $3 $1 $800 $600 X

Mark's Meals produces frozen meals, which it sells for $9 each. The company uses the FIFO inventory costing method, and it computes a new monthly foxed manufacturing overhead rate based on the actual number of meals produced that month. All costs and production levels are exactly as planned. The following data are from the company's first two months in business: (Click the icon to view the data.) Read the requirements. Requirement 1. Compute the product cost per meal produced under absorption costing and under variable costing. Do this first for January and then for February February January Less: Total product cost 70 1 all Requirement 2a. Prepare separate monthly income statements for January and for February, using absorption costing Less Absorption Variable costing costing Less Absorption Variable costing costing Less Mark's Meals Income Statement (Absorption Costing) Month Ended January 31 Requirement 2b. Prepare Mark's Meals' January and February income statements using variable costing Mark's Meals Contribution Margin Income Statement (Variable Costing) Month Ended February 28 January 31 February 28 Data table Sales...... Production.. Variable manufacturing expense per meal. Sales commission expense per meal........ January February 1,600 meals 1.800 meals 2,000 meals 1,600 meals Print Total fixed manufacturing overhead......... $800 Total fixed marketing and administrative expenses.. $600 $3 $1 Done $3 $1 $800 $600 X

Excel Applications for Accounting Principles
Excel Applications for Accounting Principles
4th Edition
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Gaylord N. Smith
Chapter7: Inventory Cost Flow Assumptions (fifolifo)
Section: Chapter Questions
Problem 9R: Click the Chart sheet tab. On the screen is a column chart showing ending inventory costs. During a...
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Mark's Meals produces frozen meals, which it sells for $9 each. The company uses the FIFO inventory costing method, and it computes a new monthly fixed manufacturing overhead rate based on the actual number of meals produced that month. All costs and production levels are exactly as planned. The following data are from the company's first two months in business: (Click the icon to view the data.) Read the requirements. Less: Less: Requirement 2b. Prepare Mark's Meals' January and February income statements using variable costing. Mark's Meals Contribution Margin Income Statement (Variable Costing) Month Ended Less: Less: In February, absorption costing operating income January 31 Requirement 3. Is operating income higher under absorption costing or variable costing in January? In February? Explain the pattern of differences in operating income based on absorption costing versus variable costing. In January, absorption costing operating income variable costing income. This is because units produced were units sold. Absorption costing defers some of As inventory M February 28 as was the case in this February, January's costs in the units of ending inventory. These costs will not be ▼ until those units are sold. Deferring these units sold for the month. ▼costs that absorption costing assigned to that inventory are expensed in variable costing operating income. This is because units produced were This Data table Sales.. Production... Variable manufacturing expense per meal. Sales commission expense per meal Total fixed manufacturing overhead $800 Total fixed marketing and administrative expenses.. $600 Print costs to the future ▼ February's absorption costing income. January 1.600 meals ,2,000 meals Done $3 $1 February 1,800 meals 1,600 meals $3 $1 $800 $600 ▼ January's absorption costing income. - X
Transcribed Image Text:Mark's Meals produces frozen meals, which it sells for $9 each. The company uses the FIFO inventory costing method, and it computes a new monthly fixed manufacturing overhead rate based on the actual number of meals produced that month. All costs and production levels are exactly as planned. The following data are from the company's first two months in business: (Click the icon to view the data.) Read the requirements. Less: Less: Requirement 2b. Prepare Mark's Meals' January and February income statements using variable costing. Mark's Meals Contribution Margin Income Statement (Variable Costing) Month Ended Less: Less: In February, absorption costing operating income January 31 Requirement 3. Is operating income higher under absorption costing or variable costing in January? In February? Explain the pattern of differences in operating income based on absorption costing versus variable costing. In January, absorption costing operating income variable costing income. This is because units produced were units sold. Absorption costing defers some of As inventory M February 28 as was the case in this February, January's costs in the units of ending inventory. These costs will not be ▼ until those units are sold. Deferring these units sold for the month. ▼costs that absorption costing assigned to that inventory are expensed in variable costing operating income. This is because units produced were This Data table Sales.. Production... Variable manufacturing expense per meal. Sales commission expense per meal Total fixed manufacturing overhead $800 Total fixed marketing and administrative expenses.. $600 Print costs to the future ▼ February's absorption costing income. January 1.600 meals ,2,000 meals Done $3 $1 February 1,800 meals 1,600 meals $3 $1 $800 $600 ▼ January's absorption costing income. - X
Mark's Meals produces frozen meals, which it sells for $9 each. The company uses the FIFO inventory costing method, and it computes a new monthly fixed manufacturing overhead rate based on the actual number of meals produced that month. All costs and production levels are exactly as planned. The following data are from the company's first two months in business: (Click the icon to view the data.) Read the requirements. Requirement 1. Compute the product cost per meal produced under absorption costing and under variable costing. Do this first for January and then for February. February Less: Less January Less: Absorption costing Total product cost Requirement 2a. Prepare separate monthly income statements for January and for February, using absorption costing. Mark's Meals Income Statement (Absorption Costing) Month Ended Less: Variable costing Absorption costing Variable costing Requirement 2b. Prepare Mark's Meals' January and February income statements using variable costing. Mark's Meals Contribution Margin Income Statement (Variable Costing) Month Ended January 31 February 28 January 31 February 28 C Data table Sales... Production.. Variable manufacturing expense per meal. Sales commission expense per meal January 1,600 meals .2,000 meals Print Total fixed manufacturing overhead $800 Total fixed marketing and administrative expenses.. $600 $3 $1 Done February 1,800 meals 1,600 meals $3 $1 $800 $600 X
Transcribed Image Text:Mark's Meals produces frozen meals, which it sells for $9 each. The company uses the FIFO inventory costing method, and it computes a new monthly fixed manufacturing overhead rate based on the actual number of meals produced that month. All costs and production levels are exactly as planned. The following data are from the company's first two months in business: (Click the icon to view the data.) Read the requirements. Requirement 1. Compute the product cost per meal produced under absorption costing and under variable costing. Do this first for January and then for February. February Less: Less January Less: Absorption costing Total product cost Requirement 2a. Prepare separate monthly income statements for January and for February, using absorption costing. Mark's Meals Income Statement (Absorption Costing) Month Ended Less: Variable costing Absorption costing Variable costing Requirement 2b. Prepare Mark's Meals' January and February income statements using variable costing. Mark's Meals Contribution Margin Income Statement (Variable Costing) Month Ended January 31 February 28 January 31 February 28 C Data table Sales... Production.. Variable manufacturing expense per meal. Sales commission expense per meal January 1,600 meals .2,000 meals Print Total fixed manufacturing overhead $800 Total fixed marketing and administrative expenses.. $600 $3 $1 Done February 1,800 meals 1,600 meals $3 $1 $800 $600 X
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