January February March Unit data: Beginning Inventory 0 100 100 Production 1,550 1,450 1,500 Sales 1,450 1,450 1,490 Variable Costs: Manufacturing Cost per unit produced $1,000 $1,000 $1,000 Marketing cost per unit sold $700 $700 $700 Fixed Costs: Manufacturing Costs $515,000 $515,000 $515,000 Marketing Costs $140,000 $140,000 $140,000 January February March Unit data: Beginning...

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Question

Accounting

January
February
March
Unit data:
Beginning Inventory
0
100
100
Production
1,550
1,450
1,500
Sales
1,450
1,450
1,490
Variable Costs:
Manufacturing Cost
per unit produced
$1,000
$1,000
$1,000
Marketing cost per unit sold
$700
$700
$700
Fixed Costs:
Manufacturing Costs
$515,000
$515,000
$515,000
Marketing Costs
$140,000
$140,000
$140,000
January
February
March
Unit data:
Beginning Inventory
0
100
100
Production
1,550
1,450
1,500
Sales
1,450
1,450
1,490
Variable Costs:
Manufacturing Cost
per unit produced
$1,000
$1,000
$1,000
Marketing cost per unit sold
$700
$700
$700
Fixed Costs:
Manufacturing Costs
$515,000
$515,000
$515,000
Marketing Costs
$140,000
$140,000
$140,000
The selling price per unit is $3,500. The budgeted level ofproduction used to calculate the budgeted fixed manufacturing costswas 1,550 units in January, 1,450 units in February, and 1,500units in March. They were so accurate at predicting theirproduction volumes there are no production volume variances toworry about. Also, there are no price, efficiency or spendingvariances.
Part II: The variable manufacturing costs per unit of QuarrymanCorporation are as follows:
January
February
March
Direct materials cost per unit
$535
$535
$535
Direct manufacturing labor cost per unit
$190
$190
$190
MOH cost per unit
$275
$275
$275
$1,000
$1,000
$1,000
1. Prepare income statement for Quarryman Corporation inJanuary, February and March 2019 under throughput costing.
2. Contrast the results of throughput costing with those ofvariable costing. If you calculate different profit figures,reconcile the difference. In other words, tell me where thedifference is, and quantify it. Again, do not be concerned withminor rounding issues, as they are not material.
3. Provide at least one reason why companies might preferthroughput costing over absorption costing or variable costing.

Answer & Explanation Solved by verified expert

4.4 Ratings (883 Votes)

1 Income Statement Under Throughput Costing Throughput Costing also called as Super Variable Costing Under this method only Direct Material Cost is considered as Variable Cost and All other variable Cost like Labor and overheads are considered as Period cost Under This method Inventories value is calculated using only Direct Material Cost So Cost of goods sold is calculated using only Direct material cost So Sales Direct Material cost of Goods sold will give us throughput contribution Then all other expenses are reduced from Throughput contribution to get Net incomeprofit Income Statement of Quarrymen Corporation under See Answer

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	January	February	March
Unit data:
Beginning Inventory	0	100	100
Production	1,550	1,450	1,500
Sales	1,450	1,450	1,490
Variable Costs:
Manufacturing Cost per unit produced	$1,000	$1,000	$1,000
Marketing cost per unit sold	$700	$700	$700
Fixed Costs:
Manufacturing Costs	$515,000	$515,000	$515,000
Marketing Costs	$140,000	$140,000	$140,000