The Pink Flamingo Buoy Ring Company keeps no Work in Process Inventories. At the beginning of 2021, it had nothing in Fi

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The Pink Flamingo Buoy Ring Company Keeps No Work In Process Inventories At The Beginning Of 2021 It Had Nothing In Fi 1 (108.08 KiB) Viewed 84 times

The Pink Flamingo Buoy Ring Company keeps no Work in Process Inventories. At the beginning of 2021, it had nothing in Finished Goods Inventory. The company had budgeted production and sales of 12,000 units. This amount is also the denominator level for 2021. Actual production for 2021 is 10,000 units and actual sales were 9,000 units in 2021. The company purchased and used the same amount of direct materials during the year. The actual selling price for 2021 was $100 per unit. At the end of 2021, any adjustments are closed totally to Cost of Goods Sold. Unit production costs using standard costing and actual costing ar as follows for 2021: Standard Cost per Unit (SQ x SP) Actual Cost per Unit Direct Materials $8.00 $8.50 Direct Labor $25.00 $30.00 Variable Overhead $12.00 $15.50 Fixed Overhead $16.00 $15.00 When using standard absorption costing, the company has the following variances for 2010: Materials Price Variance $2,500 U Variable Overhead Spending(Rate) Variance $12,000 U Materials Quantity Variance $2,000 F Variable Overhead Efficiency Variance $ 3,000 F Labor Rate Variance $12,000 U Fixed Overhead Budget Variance $ 2,000 F Labor Efficiency Variance $10,000 F Fixed Overhead Production Volume Variance $10,000 U For all costing methods, overhead is charged to production on the basis of direct labor hours. The standare for labor usage is 2.0 hours per unit, but the actual usage was 1.5 hours per unit. For both fixed and variable overhead, you may assume that the predetermined overhead rates PER HOUR are the same for bo normal costing and standard costing. The predetermined rates PER UNIT will not be the same for both normal and standard costing since normal costing charges overhead costs based on actual hours and standard costing charges overhead costs based on standard hours. Actual period expenses (marketing, distribution, and customer service expenses) are $125,000 fixed per year and $10 variable per unit sold. TASKS: Prepare 6 Income Statements. The only headed that you need on each statement is to designate which costing method is used. The costing methods are: 1. Income Statement #1: Actual Absorption Costing 2. Income Statement #2: Actual Variable Costing 3. Income Statement #3: Normal Absorption Costing 4. Income Statement #4: Normal Variable Costing 5. Income Statement #5: Standard Absorption Costing 6. Income Statement #6: Standard Variable Costing unt costs. chto acthal