Author Question: Andra's Bakery produces frozen pizzas, which it sells for $10 each. The company uses the FIFO ... (Read 429 times)

penguins · **on:** Jan 5, 2020

Andréa's Bakery produces frozen pizzas, which it sells for $10 each. The company uses the FIFO inventory costing method and it computes a new monthly fixed manufacturing overhead rate based on the actual number of meals produced that month. All costs and production levels are exactly as planned. The following data are from Andréa's Bakery first two months in business:

July

August

Sales

1,500

1,800

Production

2,100

1,500

Variable manufacturing expense per pizza

$6

Sales commission expense per pizza

$1.50

Total fixed manufacturing overhead

$1,050

Total fixed marketing and administrative expenses

$900

Required:

1.	Compute the product cost per meal produced under absorption costing and under variable

costing. Do this first for July and then for August.

2.	Prepare separate monthly income statements for July and for August, using (a) absorption

costing and (b) variable costing.

3.	Is operating income higher under absorption costing or variable costing in July? In August?

Explain the pattern of differences in operating income based on absorption costing versus variable costing.

mariahkathleeen · **Reply #1 on:** Jan 5, 2020

A FREE account is required to view all solutions!

Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.

Answer Preview

Only 25% of students answer this correctly