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A、company makes and sells a single product. At the beginning of Period 1, there are no opening inventories of the product, for which the variable production cost is $4 and the sales price $6 per unit. There are no variable selling costs. Fixed costs are $2,000 per period, of which $1,500 are fixed production costs. Normal output is 1,500 units per period. In Period 1, sales were 1,200 units, production was 1,500 units. In Period 2, sales were 1,700 units, production was 1,400 units. Required Prepare profit statements for each period and for the two periods in total using both absorption costing and marginal costing. 5 【论述题】 Prepare profit statements for each period and for the two periods in total using both absorption costing and marginal costing.
A、company makes and sells a single product. At the beginning of Period 1, there are no opening inventories of the product, for which the variable production cost is $4 and the sales price $6 per unit. There are no variable selling costs. Fixed costs are $2,000 per period, of which $1,500 are fixed production costs. Normal output is 1,500 units per period. In Period 1, sales were 1,200 units, production was 1,500 units. In Period 2, sales were 1,700 units, production was 1,400 units. Required Prepare profit statements for each period and for the two periods in total using both absorption costing and marginal costing. 5 【论述题】 Prepare profit statements for each period and for the two periods in total using both absorption costing and marginal costing.
【参考答案及解析】
It is important to notice that although production and sales volumes in each period are different, over the full period, total production volume equals sales volume. The total cost of sales is the same and therefore the total profit is the same by either method of accounting. There are differences in the reported profit in Period 1 and in Period 2, but these are merely timing differences which cancel out over a longer period of time (in this example, over the two periods). (a) Absorption costing. The absorption rate for fixed production overhead is $1,500/1,500 units = $1 per unit. The fully absorbed cost per unit = $(4+1) = $5. (b) Marginal costing
It is important to notice that although production and sales volumes in each period are different, over the full period, total production volume equals sales volume. The total cost of sales is the same and therefore the total profit is the same by either method of accounting. There are differences in the reported profit in Period 1 and in Period 2, but these are merely timing differences which cancel out over a longer period of time (in this example, over the two periods). (a) Absorption costing. The absorption rate for fixed production overhead is $1,500/1,500 units = $1 per unit. The fully absorbed cost per unit = $(4+1) = $5. (b) Marginal costing