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DanielleCPA
DanielleCPA, Certified Public Accountant (CPA)
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On June 30, the end of the first year of operations, Reinemund

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On June 30, the end of the first year of operations, Reinemund Equipment Company manufactures 2,200 units and sold 1,900 units. The following income statement was prepared, based on the variable costing concept:

Reinemund Equipment Company Variable Costing Income Statement For the Year Ended June 30,2011
Sales $45,600,000
Variable cost of goods sold:
Variable cost of goods manufactured $25,344,000
Less inventory, July 31 $3,456,000
Variable cost of goods sold $21,888,000
Manufacturing margin $23,712,000
Variable selling and administrative expenses 5,472,000
Contribution margin $18,240,000
Fixed costs:
Fixed manufacturing costs $11,616,000
Fixed selling and administrative expenses $3,648,000 $15,264,000
Income from operations $2,976,000



Determine the unit cost of goods manufactured, based on (a) the variable costing concept and (b) the absorption costing concept.
Submitted: 3 years ago.
Category: Finance
Expert:  DanielleCPA replied 3 years ago.

Hi and welcome to Just Answer! I'm happy to help answer your Finance questions.

 

 

A)

Variable Cost of Goods Manufactured / Units Manufactured = Unit Costs

25,344,000/2200 units = $11,520/unit

 

B)

(Variable Costs of Goods Manufactured + Fixed Manufacturing Costs)/Units Manufactured = Unit Costs

 

(25,344,000+11,616,000)/2,200 units = $16,800/unit

 

DanielleCPA, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 694
Experience: CPA experienced in tax and financial planning
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