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Download the Applying Excel form and enter formulas in all cells that contain question marks.

SHOW FORMULAS (NOT JUST NUMBERS IN CELLS)

For example, in cell B26 enter the formula "= B17".

After entering formulas in all of the cells that contained question marks, verify that the dollar amounts match the numbers in Review Problem 1.

The LIFO inventory flow assumption is used throughout the problem.

Check your worksheet by changing the units sold in the Data to 6,000 for Year 2. The cost of goods sold under absorption costing for Year 2 should now be $240,000. If it isnt, check cell C41. The formula in this cell should be =IF(C26

Chapter 6: Applying Excel $50 Data Selling price per unit Manufacturing costs: Variable per unit produced: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead per year Selling and administrative expenses: Variable per unit sold Fixed per year $11 $6 $3 $120,000 $4 $70,000 Year 2 Units in beginning inventory Units produced during the year Units sold during the year Year 1 0 10,000 8,000 6,000 8,000 Enter a formula into each of the cells marked with a ? below Review Problem 1: Contrasting Variable and Absorption Costing Compute the Ending Inventory Year 1 Year 2 Units in beginning inventory Units produced during the year Units sold during the year Units in ending inventory 0 ? ? ? ? ? ? ? Year 2 Compute the Absorption Costing Unit Product Cost Year 1 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Absorption costing unit product cost ? ? ? ? ? ? ? ? ? ? Construct the Absorption Costing Income Statement Year 1 Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income ? ? ? ? ? Year 2 ? ? ? ? ? Compute the Variable Costing Unit Product Cost Year 1 Year 2 Direct materials Direct labor Variable manufacturing overhead Variable costing unit product cost ? ? ? ? ? ? ? ? Construct the Variable Costing Income Statement Year 1 Year 2 ? ? ? ? ? ? Sales Variable expenses: Variable cost of goods sold Variable selling and administrative expenses Contribution margin Fixed expenses: Fixed manufacturing overhead Fixed selling and administrative expenses Net operating income

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