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JYD Corporation uses an absorption costing system for internal reporting purposes. At present, however, it is considering to use the variable costing system.

Following are some data regarding JYD Corporations budgeted and actual operations for the calendar year 2018.

Costs Budgeted Actual

Materials P25,200 P23,400

Labor 18,480 17,160

Variable Factory Overhead 8,400 7,800

Fixed Factory Overhead 10,640 10,000

Variable Selling Expenses 16,800 15,000

Fixed Selling Expenses 14,700 14,700

Variable Administrative Expenses 4,200 3,750

Fixed Administrative Expenses 6,300 6,375

Total P104,720 P98,185

Budgeted Actual

(Units) (Units)

Finished goods inventory beginning 280 280

Production 1,120 1,040

Sales 1,120 1,000

The budgeted costs were computed based on the budgeted production and sales of 1,120 units, the companys normal capacity level. The Corporation uses a predetermined factory overhead rate for applying manufacturing overhead costs to its product. The denominator level used in developing the predetermined rate is the firms normal capacity. Any over or under applied factory overhead cost is closed to cost of goods sold at the end of the year.

There is no work in process inventories at either the beginning or end of the year. The actual selling price was the same as the amount planned, P130 per unit.

The previous years planned per unit manufacturing costs were the same as the current planned unit manufacturing cost. The beginning inventory of finished goods for absorption costing purposes was valued at such per- unit manufacturing cost.

Question:

1. What is the standard product costs per unit under Absorption Costing and Variable Costing?
2. What are the manufacturing cost variances for Variable Manufacturing Cost and Fixed Manufacturing cost?
3. What is the Corporations operating income (loss) under both the absorption and variable costing methods?
4. What were the values of the companys actual ending finished goods inventory under the absorption and variable costing methods?
5. What were the Corporations total fixed costs expensed this year on both absorption and variable costing methods?
6. What was the Corporations actual manufacturing contribution margin for the year calculated on the variable costing basis?
7. What was the Corporations actual contribution margin for the year calculated on the variable costing method?
8. What were the total variable costs expensed currently by the corporation under the absorption and variable costing bases?
9. The difference between the Corporations operating income calculated on the absorption costing basis and that on the variable costing basis was how much?

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