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ACCT 321 Homework 7

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ACCT 321 Homework 7

ACCT 321 Homework 7

ACCT321

ACCT 321 Homework 7

OxiClear manufactures a tile and grout cleaner. The company was formed during the current year. As a result, there was no beginning inventory. Management is evaluating performance and inventory management issues, and desires to know both net income and ending inventory under generally accepted accounting principles (absorption costing) as well as variable costing methods. Relevant facts are as follows:

Selling price per gallon                                                                        $ 4.40

Variable manufacturing cost per gallon                                              0.80

Variable SG& A costs per gallon                                                0.90

Fixed manufacturing costs

Fixed SG& A

Total gallons produced

Total gallons sold

$

1,450,000

235,000

650,000

620,000

Absorption Costing

Variable manufacturing costs

$

Fixed manufacturing costs

Cost of goods manufactured

$

Cost of goods sold

Ending inventory

$

Sales

$

Cost of goods sold

Gross profit

$

Selling, general, & administrative costs

Variable

$

Fixed

Net income

$

Ending inventory

$

Sales

$

Variable Costing

Variable manufacturing costs

Variable manufacturing margin

$

Variable SG& A

Contribution margin

$

Fixed expenses

Manufacturing

SG& A

Net income

$

$