Muhammad Uk

Roll no 25
Managerial Acco

Problem 6-21 Total Units

Part a and b.

Direct materials
Direct labor
Variable manufacturing overhead
Fixed manufacturing overhead
Total = Variable + Fixed 240000
Units 30000

Unit product cost

May June
Sales
Variable expenses
Unit Sold 26000 34000
Variable selling and administrative expense
Unit Sold 26000 34000

Total variable expenses

Contribution margin

Fixed expenses
Fixed manufacturing overhead
Fixed selling and administrative expenses

Total fixed expenses

 Net operating income

3 Units Rate
Variable costing net operating income

Add
fixed manufacturing overhead cost deferred in inventory under absorption costing4000 8
Deduct
fixed manufacturing overhead cost released from inventory under absorption costing4000 8

Absorption costing net operating income

 Muhammad Ukasha
Roll no 25
Managerial Accounting

Absorption CostingVariable Costing

6 6
12 12
4 4
8

30 22

Rate May June

1,040,000 1,360,000

22 572000 748000

3 78000 102000

650000 850000

390,000 510,000

240,000 240,000
180,000 180,000

420,000 420,000
-30,000 90,000

May June
-30,000 90,000

32000

32000

2,000 58,000