ReVitalAde produced 13,000 cases of powdered drink mix and sold 12,000 cases in April 2018. The sales price was $ 29 , variable costs were $ 12 per case ($ 9 manufacturing and $ 3 selling and administrative), and total fixed costs were $ 100,000 ($ 91,000 manufacturing overhead and $ 9,000 selling and administrative). The company had no beginning Finished Goods Inventory.

Required:

1. Prepare the April income statement using variable costing. 2. Determine the product cost per unit.

Question

Business

Niko Hardin

27 April, 06:08

ReVitalAde produced 13,000 cases of powdered drink mix and sold 12,000 cases in April 2018. The sales price was $ 29 , variable costs were $ 12 per case ($ 9 manufacturing and $ 3 selling and administrative), and total fixed costs were $ 100,000 ($ 91,000 manufacturing overhead and $ 9,000 selling and administrative). The company had no beginning Finished Goods Inventory.

Required:

1. Prepare the April income statement using variable costing. 2. Determine the product cost per unit.

+3

Answers (1)

Know the Answer?

Gillian Freeman · Answer 1

1. Profit = $204,000.

2. Product cost per unit = $12 per unit.

Explanation:

1. Prepare the April income statement using variable costing.

Details $

Revenue ($29 * 12,000) 348,000

Total variable cost of unit sold ($12 * 12,000) 144,000

Profit 204,000

2. Determine the product cost per unit.

Total variable cost of production = $12 * 13,000 = $156,000

Total fixed cost of production = $100,000

Total cost of production = $156,000 + $100,000 = $256,000

Product cost per unit = $256,000 / 13,000 = $12 per unit.