Question details

10_Managerial Accounting Cost of Production
$ 10.00
Option #1: Cost of Production    
Paint More, LLC, has organized a new division to manufacture and sell specialty paint.  The division’s monthly costs are shown below:    
Manufacturing costs:
Variable costs per unit:
  Direct materials $12
Variable manufacturing overhead $1
Fixed manufacturing overhead costs (total) $100,000
Selling and administrative costs:  
  Variable 7% of sales
Fixed (total) $31,000
Because the production is highly automated, the company includes its labor costs in its fixed manufacturing overhead.  The gallons of paint sell for $68 each.  During September, the first month of operations, the following activity was recorded:     
Units produced 5,000    
     
Units sold 4,000    
Instructions:    
Submit an Excel document with each tab labeled by item number that demonstrates the following:    
1. Compute the unit product cost under:    
a. Absorption costing    
b. Variable costing    
2. Prepare an absorption costing income statement for September    
3. Prepare a contribution format income statement for September using variable costing    
     
Provide your answers in a clearly organized Excel spreadsheet. Check spelling and formatting for readability. Document your sources. Where applicable, written comments must be in accordance with theCSU-Global Guide to Writing and APA Requirements. Be sure to review the Module 5 Critical Thinking grading rubric, which may be accessed through the Course Information page.    
     
Available solutions