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Assignment 1: Variable Costing

The document provides information and requirements for an assignment on variable and absorption costing for Dindi Company. It includes data on units sold, produced, direct costs, overhead costs, and selling expenses. It asks the student to 1) calculate product cost under absorption costing, 2) calculate net operating income under absorption costing, 3) calculate product cost under variable costing, 4) calculate net operating income under variable costing, and 5) reconcile the difference between net incomes under the two methods.

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Winoah Hubalde
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43 views4 pages

Assignment 1: Variable Costing

The document provides information and requirements for an assignment on variable and absorption costing for Dindi Company. It includes data on units sold, produced, direct costs, overhead costs, and selling expenses. It asks the student to 1) calculate product cost under absorption costing, 2) calculate net operating income under absorption costing, 3) calculate product cost under variable costing, 4) calculate net operating income under variable costing, and 5) reconcile the difference between net incomes under the two methods.

Uploaded by

Winoah Hubalde
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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Assignment 1 : Variable costing

Hello, future CPAs,


Kindly solve the requirements of Dindi management.
The related data of Dindi Company:

Unit sold 
Units produced
Total direct materials
Total direct labor
Total variable overhead
Total fixed overhead
Total variable selling and administrative expenses
Total fixed selling and administrative expenses
Sales price per unit

Requirements:
1. How much is the product cost under Absorption costing?
Production Cost:
Total Direct Materials 589,000.00
Total Direct Labor 325,000.00
Total Variable Overhead 375,000.00
Total Fixed Overhead 167,000.00
1,456,000.00
Product Cost:
Production Cost/Units Produced
(1,456,000/10,000) 145.60

2. How much is the NOI under Absorption costing?


Income Statement (Absorption Costing)
Quantity Per Unit
Sales 12,000.00 225.00
Less: Cost of Goods Sold 12,000.00 145.60
Gross Margin 12,000.00 79.40
Less: Selling and Administrative
Variable Selling and Administrative
Fixed Selling and Administrative
Net Operating Income

3. How much is the product cost under variable costing?


Product Cost:
Total Direct Materials 589,000.00
Total Direct Labor 325,000.00
Total Variable Overhead 375,000.00
1,289,000.00
Product Cost:
Production Cost/Units Produced
(1,289,000/10,000) 128.90

4. How much is the NOI under Variable costing?


Income Statement (Variable Costing)
Quantity Per Unit
Sales 12,000.00 225.00
Less: Variable Cost
Variable Product Cost 12,000.00 128.90
Total Variable Selling and Administrative
Contribution Margin:
Less: Fixed Cost
Total Fixed Overhead
Total Fixed Selling and Administrative
Net Operating Income

5. Reconcile the difference


Difference in Net Income
Absorption Costing 539,800.00
Variable Costing 573,200.00
Difference (33,400.00)

"I accept responsibility for my


12,000.00
10,000.00
589,000.00
325,000.00
375,000.00
167,000.00
290,000.00
123,000.00
225.00

Amount Total Amount


2,700,000.00
1,747,200.00
952,800.00

290,000.00
123,000.00 413,000.00
539,800.00
Amount Total Amount
2,700,000.00

1,546,800.00
290,000.00
863200

167,000.00
123,000.00 290000
573200

Honor Pledge for Assignments


accept responsibility for my role in ensuring the integrity of the work submitted by the group in which I
participated.”

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