Absorption Costing
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Absorption Costing Salea Less: Cost Of Goods Sold Direct Material Direct Labor Variable FOH Fixed FOH Cost Of Goods Manufactuered Add:Finished Goods Opening Total Finished Goods Available Less:Finished Goods Ending Cost Of Goods Sold Adjustment of Fixed (over)/ under applied Factory overhear Gross Profit Cost Of Goods Sold (Actual) Less:Marketing and administrative Expenses
Variable marketing and admin. Expenses Fixed marketing and admin. Expenses Net Income / Profit
Direct Costing Salea Less:Variable Cost Of Goods Sold Direct Material Direct Labor Variable FOH Variable Cost Of Goods Manufactuered Add:Finished Goods Opening Total Finished Goods Available at variable cost Less:Finished Goods Ending Variable Cost Of Goods Sold GROSS CONTRIBUTION MARGIN Less:Variable Marketing and administrative Expenses CONTRIBUTION MARGIN Less:Fixed Expenses: Fixed Factory overhead Fixed Marketing and administrative Expenses OPERATING INCOME
SUMMER - 2007 or Ex -8 (MU) Required#1 Total Fixed Manufacturing cost
200,000
Budgeted Units
20,000
Fixed Manufacturing Cost absorption rate (Rs.200,000/20,000 units)
10 per unit
Amount of Fixed Manufacturing cost applied (12,000 units x Rs. 10)
120,000
Format of Income statement under Absorption costing Sales Less: Cost of Goods Sold: Variable manufacturing cost Fixed Factory overhead Cost of Goods Manufactured Less: Finished goods (at end)
(6,000 units x 80)
480,000
(12,000 units x 30) (12,000 units x 10)
360,000 120,000
(6,000 units x 40)
480,000 (240,000)
COST OF GOODS SOLD
240,000
240,000
Gross Profit Less: Marketing and administrative Fixed Marketing and Admin Operating Income
Format of Income statement under Direct costing Sales Less: Cost of Goods Sold (Variable): Direct Material xxx Direct Labor xxx Variable Factory overhead xxx
xxxxx
Variable Cost of Goods Manufacturedxxxxx Add: Finished goods (at start) xxx Total Finished goods available at variable xxxxxcost Less: Finished goods (at end) (xxx) COST OF GOODS SOLD (Variable)
(240,000)
(xxxx)
GROSS CONTRIBUTION MARGIN Less: Variable Marketing and administrative Expenses
xxxx (xxx)
CONTRIBUTION MARGIN
xxxx
Less: Fixed Expenses: Fixed Factory overhead xxx Fixed Marketing and Adminstrative expenses xxx
(xxx)
OPERATING INCOME
xxxxxx
Required# 2 Absorption Costing Method Salea Less: Cost Of Goods Sold
480,000
Variable manufacturing cost (12000 units * Rs.30) Fixed manufacturing cost Less:Closing Stock
(W-1) Cost of Production Rs.(480000/12000)*6000 Cost Of Goods Sold
360,000 120,000 480,000 240,000 240,000 240,000
Gross Profit Less:Marketing and administrative Expenses Variable marketing and admin. Expenses Fixed marketing and admin. Expenses
6000units*Rs.20 (W-2) Rs.160000*0.5)
120,000 80,000
Net Income / Profit
200,000 40,000
Required# 2 Direct Costing Method
Salea Less:Variable Cost Of Goods Sold Variable manufacturing cost (12000 units * Rs.30) Less:Closing Stock Rs(360000/12000)*6000
480,000
(W-1)
Gross Contribution
360,000 180,000
180,000 300,000
Less:Variable Marketing and administrative Expenses Variable marketing and admin. Expenses
6000units*Rs.20 (W-2)
Net Contribution Margin Less: Fixed Cost Manufacturing Marketing Loss
120,000 180,000
(Req.1) Rs.160000/2
120,000 80,000
200,000 (20,000)
Required# 3 RECONCILIATION
Absorption costind
Profit/(loss) Value of stock
40,000 240,000
Marginal costing (20,000) 180,000
Working# 1 Budgeted variable manufacturing cost Budgeted units variable cost per unit (Rs.600000/20000)
600,000 20,000 30
Working# 2 Variable Budgeted Marketing and other Expenses Budgeted units variable cost per unit
400,000 20,000 20
Difference 60,000 60,000
Format of Income statement under Absorption costing Sales Less: Cost of Goods Sold: Drect material Direct Labor Variable Factory overhead Fixed manufacturing cost Cost of Goods Manufactured Add: Finished goods (at start) Total Finished goods available Less: Finished goods (at end)
(8,000 units x Rs. 4,000) (10,000 units x 880) (10,000 units x 480) (10,000 units x 240) (10,000 units x 960)
(2,000 units x 2560)
8,800,000 4,800,000 2,400,000 9,600,000 25,600,000 25,600,000 (5,120,000)
COST OF GOODS SOLD Gross Profit Less: Marketing and administrative Expenses Fixed marketing and admin expenses Variable marketing and admin expenses
(8,000 units x 400)
5,600,000 3,200,000
OPERATING INCOME
Format of Income statement under Direct costing Sales Less: Cost of Goods Sold (Variable) Drect material Direct Labor Variable Factory overhead Variable Cost of Goods Manufactured Add: Finished goods (at start) Total Finished goods available at variable cost Less: Finished goods (at end) COST OF GOODS SOLD (Variable)
(8,000 units x Rs. 4,000) (10,000 units x 880) (10,000 units x 480) (10,000 units x 240)
(2,000 units x 1600)
8,800,000 4,800,000 2,400,000 16,000,000 16,000,000 (3,200,000)
GROSS CONTRIBUTION MARGIN Less: Variable Marketing and administrative Expenses
(8,000 units x 400)
3,200,000
CONTRIBUTION MARGIN (NET) Less: Fixed Expenses: Fixed Factory overhead Fixed Marketing and Adminstrative expenses OPERATING INCOME
9,600,000 5,600,000 Net Profit
Required no. 3: Reconcilation Statement of Operating Income: Operating Income: Absorption Costing Direct Costing
2,720,000 800,000 1,920,000
Difference
Diffence in Inventory in units Ending Inventory (in units) Opening Inventory (in units) Difference in units Fixed FOH rate
2,000 2,000 960 1,920,000
g 32,000,000
(20,480,000) 11,520,000
(8,800,000)
2,720,000
32,000,000
(12,800,000)
19,200,000
(3,200,000) 16,000,000
(15,200,000) 800,000
WINTER 2006 Required # 1 Absorption Costing Year 1 Salea Less: Cost Of Goods Sold Direct Material Direct Labor Variable FOH Fixed FOH Cost Of Goods Manufactuered Add:Finished Goods Opening Total Finished Goods Available Less:Finished Goods Ending Cost Of Goods Sold Gross Profit Less:Marketing and administrative Expenses Variable marketing and admin. Expenses Fixed marketing and admin. Expenses Net Income / Profit
Year 2 32000000
32000000
8800000 4800000 2400000 9600000
5280000 2880000 1440000 9600000
25600000 0 25600000 5120000
19200000 5120000 24320000 0
3200000 5600000
20480000
24320000
11520000
7680000
8800000 2720000
3200000 5600000
8800000 -1120000
Required # 2 Direct Costing Year 1 Salea Less:Variable Cost Of Goods Sold Direct Material Direct Labor Variable FOH Variable Cost Of Goods Manufactuered Add:Finished Goods Opening Total Finished Goods Available at variable cost Less:Finished Goods Ending Variable Cost Of Goods Sold GROSS CONTRIBUTION MARGIN Less:Variable Mrkt. & Admin Expenses CONTRIBUTION MARGIN Less:Fixed Expenses: Fixed Factory overhead Fixed Markt. & Admin Expenses OPERATING INCOME
Year 2 32000000
32000000
8800000 4800000 2400000
5280000 2880000 1440000
16000000 0 16000000 3200000
9600000 3200000 12800000 0
9600000 5600000
12800000 19200000 3200000
12800000 19200000 3200000
16000000
16000000
15200000 800000
9600000 5600000
15200000 800000
sumer2006 Required# 1 Absorption Costing Method
Salea Less: Cost Of Goods Sold Opening Stock Add:Variable manufacturing cost (24000 units * Rs.50) Fixed manufacturing cost Cost of Production Less:Closing Stock (Rs.4000*110) Cost Of Goods Sold Adjustment of Fixed (over)/ under applied Factory overhear Actual Cost of Goods Sold Gross Profit Less:Marketing and administrative Expenses Fixed marketing and admin. Expenses Net Income / Profit
4500000 1100000 1200000 1440000 3740000 440000 3300000 360000 3660000 840000
270000 570000
1440000 1800000 360000
Required# 2 Direct Costing Method
Salea Less:Variable Cost Of Goods Sold Opening Stock
4500000
(10000 units @ 50)
500000
Variable manufacturing cost (24000 units @50) Total varible COGM Less:Closing Stock (4000 units @ 50) Variable Cost Of Goods Sold Gross Contribution
1200000 1700000 200000 1500000 3000000
Less:Variable Marketing and administrative Expenses Variable marketing and admin. Expenses
20000
Net Contribution Margin
2980000
Less: Fixed Cost Manufacturing Marketing
2050000
1800000 250000
Profit
930000
Required# 3
Change in Profit
Opening Stock Closing Stock
Absorption 570000
1100000 440000
Direct
Diffrence 360000
930000
500000 200000
600000 240000
360000
SUMMER - 2005
Required # 1 Faricon Corporation Absorption Costing Sales (20000 units @ 150 ) Less: Cost Of Goods Sold Variable COGS Fixed COGD (w-1) add: Variances(w - 2) Gross Profit Less: Mrkt.& admin Exp.
3000000 1500000 300000 110000
Net Profit
1910000 1090000 500000 590000
Faricon Corporation Direct Costing Sales (20000 units @ 150 ) Less:Variable Cost Of Goods Sold Add:Variable Variance Contribution Margin Less:Fixed Expenese fixed FOH Mrkt.& Admin Net Profit
3000000 1500000 20000
450000 500000
1520000 1480000
950000 530000
W-1 Plant Capacity Budgeted FOH Per Unit FOH
30000 units 450000 15
W-2 Total unfavorable variable variance Fixed FOH Variance (budgeted prod.-actual prod.)*FOH Rate (30000-24000)*15 Total Variance
20000
90000 110000
SUMMER 2003
MOON COMPANY
Required # 1 Absorption Costing Methode
Sales (750 units @ 800) Less: Cost of Goods Sold Direct Materal Direct Labour Factory Overhead Variable Fixed Under-absorbed FOH Gross Profit Less: Mrkt. & Admin Expenses Variable Fixed
600000 225000 142500 45000 37500 5000
30000 28000
Net Profit
455000 145000
58000 87000
Required # 2 Direct Costing Methode
Sales (750 units @ 800) Less: Cost of Goods Sold Direct Materal 225000 Direct Labour 142500 Variable FOH 45000 Cost of Varible Goods Sold Gross Contribution margin Less:Variable Mrkt. & Admin Expenses Contribution Margin Less:Fixed Expenses Fixed FOH 50000 Fixed Mrkt.&Admin 28000 Net Profit
600000
412500 187500 30000 157500
78000 79500
Required # 3 RECONCILIATON Absorption Direct Difference 87000 79500 7500 Opening Ending Inventories 200 350 150 Fixed Cost @50 (150*50) 7500 Net Income
working # 1 Budgeted FOH Actual FOH
50000 45000
Under-absorbed FOH
5000
SUMMER 2002 Modern Metal Works
Required # 1(a) Absorption Costing Method
Six Months Ending 31st March,2002
Six Months Ending 30th September,2002
4900000 Sales Opening Stock Less:Cost of Add:COGM Goods Sold Total Goods availabe Less:Closing Stock Cost of Goods Sold (over)under absorbed Factory Overhead
0 2932500 2932500 517500 2415000
Gross ProfitVariable(20%of Sales) Less:Expenses Fixed(900000/2) Net Profit
980000 450000
Required # 1(b) Direct Costing Method
-50000
5600000 517500 2415000 2932500 172500 2760000
2365000 2535000
1430000 1105000
Six Months Ending 31st March,2002
100000
1120000 450000
Less: Variable Contribution ExpensesMargin
1715000 3185000 980000
800000 450000
1250000 955000
Required # 3 Absorption Direct Difference RECONCILIATON First 6 Months 1105000 955000 150000 Sec. 6 Months 1170000 1270000 -100000 Net Income Net Income
working # 1: Budgeted FOH units Actual FOH units (over)under absorbed Overhead in units "X" by @100
5600000 367500 1715000 2082500 122500
2205000
Fixed FOH Less Fixed Fixed Expenses Selling Net Profit
8000 8500
8000 7000
-500 -50000
1000 100000
1570000 1170000
Six Months Ending 30th September,2002
4900000 Sales Opening Stock 0 Less:variable Add:COGM Cost of Goods Sold 2082500 Total Goods availabe 2082500 Less:Closing Stock 367500 Gross Contribution Margin
2860000 2740000
1960000 3640000 1120000 2520000
800000 450000
1250000 1270000
SUMMER 2002 Tajir Co. Ltd
Absorption Costing Salea
6400000 (150000 units @ 40 +400000Fav. variance)
Less: Cost Of Goods Sold Direct Material Direct Labor Variable FOH Fixed FOH
1740000 2050000 800000 680000
Cost Of Goods Manufactuered 5270000 Add:Finished Goods Opening 0 Total Finished Goods Available 5270000 Less:Finished Goods Ending 175000 Cost Of Goods Sold Gross Profit Less:Marketing and administrative Expenses Variable mrkt. and admin. Exp. 960000 Fixed mrkt. and admin. Exp. 1080000 Net Income / Profit
(220000 units @ 8-20000 fav. Variance (220000 units @ 10-150000 fav. Variance (220000 units @ 4-80000 fav. Variance (220000 units @ 3+20000 fav. Variance
5035
5095000 1305000
2040000 -735000
Direct Costing Salea Less:Variable Cost Of Goods Sold Direct Material Direct Labor Variable FOH Variable Cost Of Goods Manufactuered Add:Finished Goods Opening Total Finished Goods Available at variable cost Less:Finished Goods Ending Variable Cost Of Goods Sold GROSS CONTRIBUTION MARGIN Less:Variable Marketing and administrative Expenses CONTRIBUTION MARGIN Less:Fixed Expenses: Fixed Factory overhead Fixed Marketing and administrative Expenses OPERATING INCOME
WINTER - 1998 Solo Limited
Marginal Costing Method Period 1 Sales Less:Variable COGS Add:Opening F.G Less:Closing F.G Contribution Margin Less:Fixed Cost Net Profit
Period 2
27500 15000 0 0
15000 12500 6000 6500
Period 3
22000 15000 0 -3000
12000 10000 6000 4000
Period 4
30250 13500 3000 0
16500 13750 6000 7750
24750 15000 0 -1500
13500 11250 6000 5250
Absorption Costing Method Sales Less:Cost of Good Sold Add:Opening stock Less:Closing stock over(under)obsorption FOH Net Profit
Period 1 27500 21000 0 0 0
21000 6500
working # 1 Variable cost per unit Fixed cost per unit Total cost per unit
30 12 42
(6000/500)
working # 2 Budgeted Fixed FOH (500*12) Actual Fixed FOH (450*12) Under absorption FOH
6000 5400 600
Period 2 22000 21000 0 -4200 0
16800 5200
Period 3 30250 18900 4200 0 600
23700 6550
Period 4 24750 21000 0 -2100 0
18900 5850
May-92 Absorption Costing Method January Sales Less:Cost of Goods Sold
80000 Direct Mfg. cost Fixed FOH COGM Add:Opening stock Total COGM available Less:Closing stock Add:under absorb FOH
80000 24000 104000 0 104000 52000
Gross Profit Less: Selling & Admin. Expenses Net Profit
52000
February 120000 20000 6000 26000 52000 78000 0 18000
96000
28000 8000 20000
24000 8000 16000
80000
February 120000
Marginal Costing Method January Sales Less: variable COGS Direct Mfg. cost Add:opening stock Less:closing stock
80000 0 -40000
Contribution Margin Less:Fixed Expenses Fixed FOH Selling & Admin. Net Profit
24000 8000
40000 40000
32000 8000
20000 40000 0
24000 8000
60000 60000
32000 28000
Variable marketing and admin. Expenses Fixed marketing and admin. Expenses Net Income / Profit
Direct Costing Salea Less:Variable Cost Of Goods Sold Direct Material Direct Labor Variable FOH Variable Cost Of Goods Manufactuered Add:Finished Goods Opening Total Finished Goods Available at variable cost Less:Finished Goods Ending Variable Cost Of Goods Sold GROSS CONTRIBUTION MARGIN Less:Variable Marketing and administrative Expenses CONTRIBUTION MARGIN Less:Fixed Expenses: Fixed Factory overhead Fixed Marketing and administrative Expenses OPERATING INCOME
SUMMER - 2007 or Ex -8 (MU) Required#1 Total Fixed Manufacturing cost
200,000
Budgeted Units
20,000
Fixed Manufacturing Cost absorption rate (Rs.200,000/20,000 units)
10 per unit
Amount of Fixed Manufacturing cost applied (12,000 units x Rs. 10)
120,000
Format of Income statement under Absorption costing Sales Less: Cost of Goods Sold: Variable manufacturing cost Fixed Factory overhead Cost of Goods Manufactured Less: Finished goods (at end)
(6,000 units x 80)
480,000
(12,000 units x 30) (12,000 units x 10)
360,000 120,000
(6,000 units x 40)
480,000 (240,000)
COST OF GOODS SOLD
240,000
240,000
Gross Profit Less: Marketing and administrative Fixed Marketing and Admin Operating Income
Format of Income statement under Direct costing Sales Less: Cost of Goods Sold (Variable): Direct Material xxx Direct Labor xxx Variable Factory overhead xxx
xxxxx
Variable Cost of Goods Manufacturedxxxxx Add: Finished goods (at start) xxx Total Finished goods available at variable xxxxxcost Less: Finished goods (at end) (xxx) COST OF GOODS SOLD (Variable)
(240,000)
(xxxx)
GROSS CONTRIBUTION MARGIN Less: Variable Marketing and administrative Expenses
xxxx (xxx)
CONTRIBUTION MARGIN
xxxx
Less: Fixed Expenses: Fixed Factory overhead xxx Fixed Marketing and Adminstrative expenses xxx
(xxx)
OPERATING INCOME
xxxxxx
Required# 2 Absorption Costing Method Salea Less: Cost Of Goods Sold
480,000
Variable manufacturing cost (12000 units * Rs.30) Fixed manufacturing cost Less:Closing Stock
(W-1) Cost of Production Rs.(480000/12000)*6000 Cost Of Goods Sold
360,000 120,000 480,000 240,000 240,000 240,000
Gross Profit Less:Marketing and administrative Expenses Variable marketing and admin. Expenses Fixed marketing and admin. Expenses
6000units*Rs.20 (W-2) Rs.160000*0.5)
120,000 80,000
Net Income / Profit
200,000 40,000
Required# 2 Direct Costing Method
Salea Less:Variable Cost Of Goods Sold Variable manufacturing cost (12000 units * Rs.30) Less:Closing Stock Rs(360000/12000)*6000
480,000
(W-1)
Gross Contribution
360,000 180,000
180,000 300,000
Less:Variable Marketing and administrative Expenses Variable marketing and admin. Expenses
6000units*Rs.20 (W-2)
Net Contribution Margin Less: Fixed Cost Manufacturing Marketing Loss
120,000 180,000
(Req.1) Rs.160000/2
120,000 80,000
200,000 (20,000)
Required# 3 RECONCILIATION
Absorption costind
Profit/(loss) Value of stock
40,000 240,000
Marginal costing (20,000) 180,000
Working# 1 Budgeted variable manufacturing cost Budgeted units variable cost per unit (Rs.600000/20000)
600,000 20,000 30
Working# 2 Variable Budgeted Marketing and other Expenses Budgeted units variable cost per unit
400,000 20,000 20
Difference 60,000 60,000
Format of Income statement under Absorption costing Sales Less: Cost of Goods Sold: Drect material Direct Labor Variable Factory overhead Fixed manufacturing cost Cost of Goods Manufactured Add: Finished goods (at start) Total Finished goods available Less: Finished goods (at end)
(8,000 units x Rs. 4,000) (10,000 units x 880) (10,000 units x 480) (10,000 units x 240) (10,000 units x 960)
(2,000 units x 2560)
8,800,000 4,800,000 2,400,000 9,600,000 25,600,000 25,600,000 (5,120,000)
COST OF GOODS SOLD Gross Profit Less: Marketing and administrative Expenses Fixed marketing and admin expenses Variable marketing and admin expenses
(8,000 units x 400)
5,600,000 3,200,000
OPERATING INCOME
Format of Income statement under Direct costing Sales Less: Cost of Goods Sold (Variable) Drect material Direct Labor Variable Factory overhead Variable Cost of Goods Manufactured Add: Finished goods (at start) Total Finished goods available at variable cost Less: Finished goods (at end) COST OF GOODS SOLD (Variable)
(8,000 units x Rs. 4,000) (10,000 units x 880) (10,000 units x 480) (10,000 units x 240)
(2,000 units x 1600)
8,800,000 4,800,000 2,400,000 16,000,000 16,000,000 (3,200,000)
GROSS CONTRIBUTION MARGIN Less: Variable Marketing and administrative Expenses
(8,000 units x 400)
3,200,000
CONTRIBUTION MARGIN (NET) Less: Fixed Expenses: Fixed Factory overhead Fixed Marketing and Adminstrative expenses OPERATING INCOME
9,600,000 5,600,000 Net Profit
Required no. 3: Reconcilation Statement of Operating Income: Operating Income: Absorption Costing Direct Costing
2,720,000 800,000 1,920,000
Difference
Diffence in Inventory in units Ending Inventory (in units) Opening Inventory (in units) Difference in units Fixed FOH rate
2,000 2,000 960 1,920,000
g 32,000,000
(20,480,000) 11,520,000
(8,800,000)
2,720,000
32,000,000
(12,800,000)
19,200,000
(3,200,000) 16,000,000
(15,200,000) 800,000
WINTER 2006 Required # 1 Absorption Costing Year 1 Salea Less: Cost Of Goods Sold Direct Material Direct Labor Variable FOH Fixed FOH Cost Of Goods Manufactuered Add:Finished Goods Opening Total Finished Goods Available Less:Finished Goods Ending Cost Of Goods Sold Gross Profit Less:Marketing and administrative Expenses Variable marketing and admin. Expenses Fixed marketing and admin. Expenses Net Income / Profit
Year 2 32000000
32000000
8800000 4800000 2400000 9600000
5280000 2880000 1440000 9600000
25600000 0 25600000 5120000
19200000 5120000 24320000 0
3200000 5600000
20480000
24320000
11520000
7680000
8800000 2720000
3200000 5600000
8800000 -1120000
Required # 2 Direct Costing Year 1 Salea Less:Variable Cost Of Goods Sold Direct Material Direct Labor Variable FOH Variable Cost Of Goods Manufactuered Add:Finished Goods Opening Total Finished Goods Available at variable cost Less:Finished Goods Ending Variable Cost Of Goods Sold GROSS CONTRIBUTION MARGIN Less:Variable Mrkt. & Admin Expenses CONTRIBUTION MARGIN Less:Fixed Expenses: Fixed Factory overhead Fixed Markt. & Admin Expenses OPERATING INCOME
Year 2 32000000
32000000
8800000 4800000 2400000
5280000 2880000 1440000
16000000 0 16000000 3200000
9600000 3200000 12800000 0
9600000 5600000
12800000 19200000 3200000
12800000 19200000 3200000
16000000
16000000
15200000 800000
9600000 5600000
15200000 800000
sumer2006 Required# 1 Absorption Costing Method
Salea Less: Cost Of Goods Sold Opening Stock Add:Variable manufacturing cost (24000 units * Rs.50) Fixed manufacturing cost Cost of Production Less:Closing Stock (Rs.4000*110) Cost Of Goods Sold Adjustment of Fixed (over)/ under applied Factory overhear Actual Cost of Goods Sold Gross Profit Less:Marketing and administrative Expenses Fixed marketing and admin. Expenses Net Income / Profit
4500000 1100000 1200000 1440000 3740000 440000 3300000 360000 3660000 840000
270000 570000
1440000 1800000 360000
Required# 2 Direct Costing Method
Salea Less:Variable Cost Of Goods Sold Opening Stock
4500000
(10000 units @ 50)
500000
Variable manufacturing cost (24000 units @50) Total varible COGM Less:Closing Stock (4000 units @ 50) Variable Cost Of Goods Sold Gross Contribution
1200000 1700000 200000 1500000 3000000
Less:Variable Marketing and administrative Expenses Variable marketing and admin. Expenses
20000
Net Contribution Margin
2980000
Less: Fixed Cost Manufacturing Marketing
2050000
1800000 250000
Profit
930000
Required# 3
Change in Profit
Opening Stock Closing Stock
Absorption 570000
1100000 440000
Direct
Diffrence 360000
930000
500000 200000
600000 240000
360000
SUMMER - 2005
Required # 1 Faricon Corporation Absorption Costing Sales (20000 units @ 150 ) Less: Cost Of Goods Sold Variable COGS Fixed COGD (w-1) add: Variances(w - 2) Gross Profit Less: Mrkt.& admin Exp.
3000000 1500000 300000 110000
Net Profit
1910000 1090000 500000 590000
Faricon Corporation Direct Costing Sales (20000 units @ 150 ) Less:Variable Cost Of Goods Sold Add:Variable Variance Contribution Margin Less:Fixed Expenese fixed FOH Mrkt.& Admin Net Profit
3000000 1500000 20000
450000 500000
1520000 1480000
950000 530000
W-1 Plant Capacity Budgeted FOH Per Unit FOH
30000 units 450000 15
W-2 Total unfavorable variable variance Fixed FOH Variance (budgeted prod.-actual prod.)*FOH Rate (30000-24000)*15 Total Variance
20000
90000 110000
SUMMER 2003
MOON COMPANY
Required # 1 Absorption Costing Methode
Sales (750 units @ 800) Less: Cost of Goods Sold Direct Materal Direct Labour Factory Overhead Variable Fixed Under-absorbed FOH Gross Profit Less: Mrkt. & Admin Expenses Variable Fixed
600000 225000 142500 45000 37500 5000
30000 28000
Net Profit
455000 145000
58000 87000
Required # 2 Direct Costing Methode
Sales (750 units @ 800) Less: Cost of Goods Sold Direct Materal 225000 Direct Labour 142500 Variable FOH 45000 Cost of Varible Goods Sold Gross Contribution margin Less:Variable Mrkt. & Admin Expenses Contribution Margin Less:Fixed Expenses Fixed FOH 50000 Fixed Mrkt.&Admin 28000 Net Profit
600000
412500 187500 30000 157500
78000 79500
Required # 3 RECONCILIATON Absorption Direct Difference 87000 79500 7500 Opening Ending Inventories 200 350 150 Fixed Cost @50 (150*50) 7500 Net Income
working # 1 Budgeted FOH Actual FOH
50000 45000
Under-absorbed FOH
5000
SUMMER 2002 Modern Metal Works
Required # 1(a) Absorption Costing Method
Six Months Ending 31st March,2002
Six Months Ending 30th September,2002
4900000 Sales Opening Stock Less:Cost of Add:COGM Goods Sold Total Goods availabe Less:Closing Stock Cost of Goods Sold (over)under absorbed Factory Overhead
0 2932500 2932500 517500 2415000
Gross ProfitVariable(20%of Sales) Less:Expenses Fixed(900000/2) Net Profit
980000 450000
Required # 1(b) Direct Costing Method
-50000
5600000 517500 2415000 2932500 172500 2760000
2365000 2535000
1430000 1105000
Six Months Ending 31st March,2002
100000
1120000 450000
Less: Variable Contribution ExpensesMargin
1715000 3185000 980000
800000 450000
1250000 955000
Required # 3 Absorption Direct Difference RECONCILIATON First 6 Months 1105000 955000 150000 Sec. 6 Months 1170000 1270000 -100000 Net Income Net Income
working # 1: Budgeted FOH units Actual FOH units (over)under absorbed Overhead in units "X" by @100
5600000 367500 1715000 2082500 122500
2205000
Fixed FOH Less Fixed Fixed Expenses Selling Net Profit
8000 8500
8000 7000
-500 -50000
1000 100000
1570000 1170000
Six Months Ending 30th September,2002
4900000 Sales Opening Stock 0 Less:variable Add:COGM Cost of Goods Sold 2082500 Total Goods availabe 2082500 Less:Closing Stock 367500 Gross Contribution Margin
2860000 2740000
1960000 3640000 1120000 2520000
800000 450000
1250000 1270000
SUMMER 2002 Tajir Co. Ltd
Absorption Costing Salea
6400000 (150000 units @ 40 +400000Fav. variance)
Less: Cost Of Goods Sold Direct Material Direct Labor Variable FOH Fixed FOH
1740000 2050000 800000 680000
Cost Of Goods Manufactuered 5270000 Add:Finished Goods Opening 0 Total Finished Goods Available 5270000 Less:Finished Goods Ending 175000 Cost Of Goods Sold Gross Profit Less:Marketing and administrative Expenses Variable mrkt. and admin. Exp. 960000 Fixed mrkt. and admin. Exp. 1080000 Net Income / Profit
(220000 units @ 8-20000 fav. Variance (220000 units @ 10-150000 fav. Variance (220000 units @ 4-80000 fav. Variance (220000 units @ 3+20000 fav. Variance
5035
5095000 1305000
2040000 -735000
Direct Costing Salea Less:Variable Cost Of Goods Sold Direct Material Direct Labor Variable FOH Variable Cost Of Goods Manufactuered Add:Finished Goods Opening Total Finished Goods Available at variable cost Less:Finished Goods Ending Variable Cost Of Goods Sold GROSS CONTRIBUTION MARGIN Less:Variable Marketing and administrative Expenses CONTRIBUTION MARGIN Less:Fixed Expenses: Fixed Factory overhead Fixed Marketing and administrative Expenses OPERATING INCOME
WINTER - 1998 Solo Limited
Marginal Costing Method Period 1 Sales Less:Variable COGS Add:Opening F.G Less:Closing F.G Contribution Margin Less:Fixed Cost Net Profit
Period 2
27500 15000 0 0
15000 12500 6000 6500
Period 3
22000 15000 0 -3000
12000 10000 6000 4000
Period 4
30250 13500 3000 0
16500 13750 6000 7750
24750 15000 0 -1500
13500 11250 6000 5250
Absorption Costing Method Sales Less:Cost of Good Sold Add:Opening stock Less:Closing stock over(under)obsorption FOH Net Profit
Period 1 27500 21000 0 0 0
21000 6500
working # 1 Variable cost per unit Fixed cost per unit Total cost per unit
30 12 42
(6000/500)
working # 2 Budgeted Fixed FOH (500*12) Actual Fixed FOH (450*12) Under absorption FOH
6000 5400 600
Period 2 22000 21000 0 -4200 0
16800 5200
Period 3 30250 18900 4200 0 600
23700 6550
Period 4 24750 21000 0 -2100 0
18900 5850
May-92 Absorption Costing Method January Sales Less:Cost of Goods Sold
80000 Direct Mfg. cost Fixed FOH COGM Add:Opening stock Total COGM available Less:Closing stock Add:under absorb FOH
80000 24000 104000 0 104000 52000
Gross Profit Less: Selling & Admin. Expenses Net Profit
52000
February 120000 20000 6000 26000 52000 78000 0 18000
96000
28000 8000 20000
24000 8000 16000
80000
February 120000
Marginal Costing Method January Sales Less: variable COGS Direct Mfg. cost Add:opening stock Less:closing stock
80000 0 -40000
Contribution Margin Less:Fixed Expenses Fixed FOH Selling & Admin. Net Profit
24000 8000
40000 40000
32000 8000
20000 40000 0
24000 8000
60000 60000
32000 28000
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