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$10.00 ACC 227 Ex 9-16 and 9-17 Costing

• From Business: Accounting , Economics: Accounting
• Closed, but you can still post tutorials
• Due on Dec. 20, 2008
• Asked on Dec 16, 2008 at 7:49:43PM

Q:

9-16 Variable and absorption costing, explaining operating-income differences. Nascar Motors assembles and sells motor vehicles and uses standard costing. Actual data relating to April and May 2006 are:
Unit data April May
Beginning inventory 0 0
Production 500 400
Sales 350 520
Variable cost
Manufacturing cost pre unit produced $10,000 10,000
Operating cost per unit sold 3,000 3.000
Fixed cost
Manufacturing cost $2,000,000 2,000,000
Operating cost 600,000 600,000

The selling price per vehicle is $24,000. The budgeted level of production used to calculate the budgeted
fixed manufacturing cost per unit is 500 units. There are no price, efficiency, or spending variances. Any
production-volume variance is written off to cost of goods sold in the month in which it occurs.
If you want to use Excel to solve this exercise, go to the Excel Lab at www.prenhall.com/horngren/cost12e
and download the template for Exercise 9-16.
1. Prepare April and May 2006 income statements for Nascar 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.

9-17 Throughput costing (continuation of 9-16). The variable manufacturing costs per unit of Nascar
Motors are:
April May
Direct material cost per unit $6,700 6,700
Direct manufacturing labor cost per unit 1,500 1,500
Manufacturing overhead cost per unit 1,800 1,800

If you want to use Excel to solve this exercise, go to the Excel Lab at www.prenhall.com/horngren/cost12e
and download the template for Exercise 9-16.
1. Prepare income statements for Nascar Motors in April and May of 2006 under throughput costing.
2. Contrast the results in requirement 1 with those in requirement 1 of Exercise 9-16.
3. Give one motivation for Nascar Motors to adopt throughput costing.

See attachment for templates

 

Attachments:
ACC_227_Appendix_E(1).xlsx (19K)

Attachments: