SlideShare a Scribd company logo
1 of 3
Sivan Co. manufactures and sells one product. For the year, they started with no opening
inventory; produced 100,000 units, but only sold 70,000 units. The selling price per each unit is
$70. The variable costs per unit were:
Direct materials.........................7
Direct Labor .............................6
Variable manufacturing overhead....5
Variable selling and administrative
Solution
a) Variable costing
Sales (70000 units X $ 70) = 4900,000
Less: Variable cost of goods sold
[opening inventory nil
Variable cost of goods produced (100000 X 18) = 1800,000
less closing inventory (30000 units X 18) = 540000] 1260,000
Gross profit (4900,000-1260000) =36,40,000
Less: Selling and administrative overhead
Variable selling and administrative overhead ( 70000 X 6) 420000
Less : Period cost
Fixed manufacturing overhead 700000
Fixed selling and administrative overhead 300000
Net income =2220,000
note:
1.total variable cost = diect material+direct labor+variable maufacturing overhead
= 7+6+5 = 18
2. closing inventory = 100000-70000 = 30000
b) Absorbtion costing
Sales (70000 units X $ 70) = 4900,000
Less: Variable cost of goods sold
[opening inventory nil
Variable cost of goods produced  (100000 X 25) = 2500,000
less closing inventory (30000 units X 25) = 750,000] 17 50,000
Gross profit (4900,000 - 1750000) = 3150,000
Less: Selling and administrative overhead
Variable selling and administrative overhead ( 70000 X 6) 420000
Fixed selling and administrative overhead 300000
Net income = 1030,000
note:
1. Manufacturing cost per unit
total variable cost = diect material+direct labor+variable maufacturing overhead
= 7+6+5 = 18
Fixed (700000/100000) = 7
25
Sivan Co- manufactures and sells one product- For the year- they start (3).docx

More Related Content

Similar to Sivan Co- manufactures and sells one product- For the year- they start (3).docx (11)

Absorption and marginal costing
Absorption and marginal costingAbsorption and marginal costing
Absorption and marginal costing
 
ADVANCE MANAGENT COST
ADVANCE MANAGENT COST ADVANCE MANAGENT COST
ADVANCE MANAGENT COST
 
marginal and absorption costing
marginal and absorption costingmarginal and absorption costing
marginal and absorption costing
 
Budgets
BudgetsBudgets
Budgets
 
Variance Analysis.pptx
 Variance Analysis.pptx Variance Analysis.pptx
Variance Analysis.pptx
 
Fundamentals of accounting - cost value profit (cvp)
Fundamentals of accounting - cost value profit (cvp)Fundamentals of accounting - cost value profit (cvp)
Fundamentals of accounting - cost value profit (cvp)
 
Costi Industriali e Costi Variabili: 3.Imputazione dei costi unitari
Costi Industriali e Costi Variabili: 3.Imputazione dei costi unitariCosti Industriali e Costi Variabili: 3.Imputazione dei costi unitari
Costi Industriali e Costi Variabili: 3.Imputazione dei costi unitari
 
Exercises with solutions CHAPTER 0104 (1).pdf
Exercises with solutions CHAPTER 0104 (1).pdfExercises with solutions CHAPTER 0104 (1).pdf
Exercises with solutions CHAPTER 0104 (1).pdf
 
Variable costing a tool for management
Variable costing a tool for managementVariable costing a tool for management
Variable costing a tool for management
 
Absorption And Variable Costing
Absorption And Variable CostingAbsorption And Variable Costing
Absorption And Variable Costing
 
CVP analysis
CVP analysis CVP analysis
CVP analysis
 

More from rennaknapp

Json File - { -student_id-- 101- -first_name-- -James--.docx
Json File -   {     -student_id-- 101-     -first_name-- -James--.docxJson File -   {     -student_id-- 101-     -first_name-- -James--.docx
Json File - { -student_id-- 101- -first_name-- -James--.docx
rennaknapp
 
John plans to add a new operation Peek to the stackADT- This new opera.docx
John plans to add a new operation Peek to the stackADT- This new opera.docxJohn plans to add a new operation Peek to the stackADT- This new opera.docx
John plans to add a new operation Peek to the stackADT- This new opera.docx
rennaknapp
 

More from rennaknapp (20)

Language is C++ I'm having trouble making my code meet these requireme.docx
Language is C++ I'm having trouble making my code meet these requireme.docxLanguage is C++ I'm having trouble making my code meet these requireme.docx
Language is C++ I'm having trouble making my code meet these requireme.docx
 
Land use changes and changing climatic conditions caused by human acti.docx
Land use changes and changing climatic conditions caused by human acti.docxLand use changes and changing climatic conditions caused by human acti.docx
Land use changes and changing climatic conditions caused by human acti.docx
 
Kimberly had to come up With a whictue data collection and analysis pr.docx
Kimberly had to come up With a whictue data collection and analysis pr.docxKimberly had to come up With a whictue data collection and analysis pr.docx
Kimberly had to come up With a whictue data collection and analysis pr.docx
 
Korb et al- (2000) obtained blood samples extracted fom patients infec.docx
Korb et al- (2000) obtained blood samples extracted fom patients infec.docxKorb et al- (2000) obtained blood samples extracted fom patients infec.docx
Korb et al- (2000) obtained blood samples extracted fom patients infec.docx
 
keep it simple pls Create a project named labExamCCCS221 containing fo.docx
keep it simple pls Create a project named labExamCCCS221 containing fo.docxkeep it simple pls Create a project named labExamCCCS221 containing fo.docx
keep it simple pls Create a project named labExamCCCS221 containing fo.docx
 
l Question 4 1 pts Gatekeeper tumor suppressor genes--- Encode prote.docx
l   Question 4 1 pts Gatekeeper tumor suppressor genes--- Encode prote.docxl   Question 4 1 pts Gatekeeper tumor suppressor genes--- Encode prote.docx
l Question 4 1 pts Gatekeeper tumor suppressor genes--- Encode prote.docx
 
L0-4 During 2022- Jenny- age 14- lives in a household with her father-.docx
L0-4 During 2022- Jenny- age 14- lives in a household with her father-.docxL0-4 During 2022- Jenny- age 14- lives in a household with her father-.docx
L0-4 During 2022- Jenny- age 14- lives in a household with her father-.docx
 
L0-7 In 2022- Jack- age 12 - has interest income of $4-900 on funds he.docx
L0-7 In 2022- Jack- age 12 - has interest income of $4-900 on funds he.docxL0-7 In 2022- Jack- age 12 - has interest income of $4-900 on funds he.docx
L0-7 In 2022- Jack- age 12 - has interest income of $4-900 on funds he.docx
 
Kyle is a student with an emotional behavioral disorder- He has also b.docx
Kyle is a student with an emotional behavioral disorder- He has also b.docxKyle is a student with an emotional behavioral disorder- He has also b.docx
Kyle is a student with an emotional behavioral disorder- He has also b.docx
 
Json File - { -student_id-- 101- -first_name-- -James--.docx
Json File -   {     -student_id-- 101-     -first_name-- -James--.docxJson File -   {     -student_id-- 101-     -first_name-- -James--.docx
Json File - { -student_id-- 101- -first_name-- -James--.docx
 
Make a concept map that shows the hierarchical relationship between th.docx
Make a concept map that shows the hierarchical relationship between th.docxMake a concept map that shows the hierarchical relationship between th.docx
Make a concept map that shows the hierarchical relationship between th.docx
 
Jordan and Alyssa are saving for their daughter Taylor's college educa.docx
Jordan and Alyssa are saving for their daughter Taylor's college educa.docxJordan and Alyssa are saving for their daughter Taylor's college educa.docx
Jordan and Alyssa are saving for their daughter Taylor's college educa.docx
 
John receives $3-400 from an investment at the beginning of every half.docx
John receives $3-400 from an investment at the beginning of every half.docxJohn receives $3-400 from an investment at the beginning of every half.docx
John receives $3-400 from an investment at the beginning of every half.docx
 
Many documents use a specific format for a person's name- Write a prog.docx
Many documents use a specific format for a person's name- Write a prog.docxMany documents use a specific format for a person's name- Write a prog.docx
Many documents use a specific format for a person's name- Write a prog.docx
 
Many crimes- like embezzlement- have definite trends- The demographic.docx
Many crimes- like embezzlement- have definite trends- The demographic.docxMany crimes- like embezzlement- have definite trends- The demographic.docx
Many crimes- like embezzlement- have definite trends- The demographic.docx
 
Management The consequences of unresolved conflict often have devastat.docx
Management The consequences of unresolved conflict often have devastat.docxManagement The consequences of unresolved conflict often have devastat.docx
Management The consequences of unresolved conflict often have devastat.docx
 
Make a star field as in Star Trek (the original series)- like MS's.docx
Make a star field as in Star Trek (the original series)- like  MS's.docxMake a star field as in Star Trek (the original series)- like  MS's.docx
Make a star field as in Star Trek (the original series)- like MS's.docx
 
MAKE a CONCEPT MAP illustrating how glycolysis- the Krebs-Citric acid.docx
MAKE a CONCEPT MAP illustrating how glycolysis- the Krebs-Citric acid.docxMAKE a CONCEPT MAP illustrating how glycolysis- the Krebs-Citric acid.docx
MAKE a CONCEPT MAP illustrating how glycolysis- the Krebs-Citric acid.docx
 
John plans to add a new operation Peek to the stackADT- This new opera.docx
John plans to add a new operation Peek to the stackADT- This new opera.docxJohn plans to add a new operation Peek to the stackADT- This new opera.docx
John plans to add a new operation Peek to the stackADT- This new opera.docx
 
John is a part of a team that has been gathered temporarily to develop.docx
John is a part of a team that has been gathered temporarily to develop.docxJohn is a part of a team that has been gathered temporarily to develop.docx
John is a part of a team that has been gathered temporarily to develop.docx
 

Recently uploaded

MuleSoft Integration with AWS Textract | Calling AWS Textract API |AWS - Clou...
MuleSoft Integration with AWS Textract | Calling AWS Textract API |AWS - Clou...MuleSoft Integration with AWS Textract | Calling AWS Textract API |AWS - Clou...
MuleSoft Integration with AWS Textract | Calling AWS Textract API |AWS - Clou...
MysoreMuleSoftMeetup
 
會考英聽會考英聽會考英聽會考英聽會考英聽會考英聽會考英聽會考英聽會考英聽會考英聽
會考英聽會考英聽會考英聽會考英聽會考英聽會考英聽會考英聽會考英聽會考英聽會考英聽會考英聽會考英聽會考英聽會考英聽會考英聽會考英聽會考英聽會考英聽會考英聽會考英聽
會考英聽會考英聽會考英聽會考英聽會考英聽會考英聽會考英聽會考英聽會考英聽會考英聽
中 央社
 
會考英文會考英文會考英文會考英文會考英文會考英文會考英文會考英文會考英文會考英文會考英文
會考英文會考英文會考英文會考英文會考英文會考英文會考英文會考英文會考英文會考英文會考英文會考英文會考英文會考英文會考英文會考英文會考英文會考英文會考英文會考英文會考英文會考英文
會考英文會考英文會考英文會考英文會考英文會考英文會考英文會考英文會考英文會考英文會考英文
中 央社
 

Recently uploaded (20)

MuleSoft Integration with AWS Textract | Calling AWS Textract API |AWS - Clou...
MuleSoft Integration with AWS Textract | Calling AWS Textract API |AWS - Clou...MuleSoft Integration with AWS Textract | Calling AWS Textract API |AWS - Clou...
MuleSoft Integration with AWS Textract | Calling AWS Textract API |AWS - Clou...
 
How to Send Pro Forma Invoice to Your Customers in Odoo 17
How to Send Pro Forma Invoice to Your Customers in Odoo 17How to Send Pro Forma Invoice to Your Customers in Odoo 17
How to Send Pro Forma Invoice to Your Customers in Odoo 17
 
How to Manage Website in Odoo 17 Studio App.pptx
How to Manage Website in Odoo 17 Studio App.pptxHow to Manage Website in Odoo 17 Studio App.pptx
How to Manage Website in Odoo 17 Studio App.pptx
 
Supporting Newcomer Multilingual Learners
Supporting Newcomer  Multilingual LearnersSupporting Newcomer  Multilingual Learners
Supporting Newcomer Multilingual Learners
 
Improved Approval Flow in Odoo 17 Studio App
Improved Approval Flow in Odoo 17 Studio AppImproved Approval Flow in Odoo 17 Studio App
Improved Approval Flow in Odoo 17 Studio App
 
Stl Algorithms in C++ jjjjjjjjjjjjjjjjjj
Stl Algorithms in C++ jjjjjjjjjjjjjjjjjjStl Algorithms in C++ jjjjjjjjjjjjjjjjjj
Stl Algorithms in C++ jjjjjjjjjjjjjjjjjj
 
24 ĐỀ THAM KHẢO KÌ THI TUYỂN SINH VÀO LỚP 10 MÔN TIẾNG ANH SỞ GIÁO DỤC HẢI DƯ...
24 ĐỀ THAM KHẢO KÌ THI TUYỂN SINH VÀO LỚP 10 MÔN TIẾNG ANH SỞ GIÁO DỤC HẢI DƯ...24 ĐỀ THAM KHẢO KÌ THI TUYỂN SINH VÀO LỚP 10 MÔN TIẾNG ANH SỞ GIÁO DỤC HẢI DƯ...
24 ĐỀ THAM KHẢO KÌ THI TUYỂN SINH VÀO LỚP 10 MÔN TIẾNG ANH SỞ GIÁO DỤC HẢI DƯ...
 
Analyzing and resolving a communication crisis in Dhaka textiles LTD.pptx
Analyzing and resolving a communication crisis in Dhaka textiles LTD.pptxAnalyzing and resolving a communication crisis in Dhaka textiles LTD.pptx
Analyzing and resolving a communication crisis in Dhaka textiles LTD.pptx
 
VAMOS CUIDAR DO NOSSO PLANETA! .
VAMOS CUIDAR DO NOSSO PLANETA!                    .VAMOS CUIDAR DO NOSSO PLANETA!                    .
VAMOS CUIDAR DO NOSSO PLANETA! .
 
OS-operating systems- ch05 (CPU Scheduling) ...
OS-operating systems- ch05 (CPU Scheduling) ...OS-operating systems- ch05 (CPU Scheduling) ...
OS-operating systems- ch05 (CPU Scheduling) ...
 
e-Sealing at EADTU by Kamakshi Rajagopal
e-Sealing at EADTU by Kamakshi Rajagopale-Sealing at EADTU by Kamakshi Rajagopal
e-Sealing at EADTU by Kamakshi Rajagopal
 
會考英聽會考英聽會考英聽會考英聽會考英聽會考英聽會考英聽會考英聽會考英聽會考英聽
會考英聽會考英聽會考英聽會考英聽會考英聽會考英聽會考英聽會考英聽會考英聽會考英聽會考英聽會考英聽會考英聽會考英聽會考英聽會考英聽會考英聽會考英聽會考英聽會考英聽
會考英聽會考英聽會考英聽會考英聽會考英聽會考英聽會考英聽會考英聽會考英聽會考英聽
 
How To Create Editable Tree View in Odoo 17
How To Create Editable Tree View in Odoo 17How To Create Editable Tree View in Odoo 17
How To Create Editable Tree View in Odoo 17
 
Including Mental Health Support in Project Delivery, 14 May.pdf
Including Mental Health Support in Project Delivery, 14 May.pdfIncluding Mental Health Support in Project Delivery, 14 May.pdf
Including Mental Health Support in Project Delivery, 14 May.pdf
 
Basic Civil Engineering notes on Transportation Engineering & Modes of Transport
Basic Civil Engineering notes on Transportation Engineering & Modes of TransportBasic Civil Engineering notes on Transportation Engineering & Modes of Transport
Basic Civil Engineering notes on Transportation Engineering & Modes of Transport
 
Mattingly "AI and Prompt Design: LLMs with NER"
Mattingly "AI and Prompt Design: LLMs with NER"Mattingly "AI and Prompt Design: LLMs with NER"
Mattingly "AI and Prompt Design: LLMs with NER"
 
會考英文會考英文會考英文會考英文會考英文會考英文會考英文會考英文會考英文會考英文會考英文
會考英文會考英文會考英文會考英文會考英文會考英文會考英文會考英文會考英文會考英文會考英文會考英文會考英文會考英文會考英文會考英文會考英文會考英文會考英文會考英文會考英文會考英文
會考英文會考英文會考英文會考英文會考英文會考英文會考英文會考英文會考英文會考英文會考英文
 
PSYPACT- Practicing Over State Lines May 2024.pptx
PSYPACT- Practicing Over State Lines May 2024.pptxPSYPACT- Practicing Over State Lines May 2024.pptx
PSYPACT- Practicing Over State Lines May 2024.pptx
 
The Liver & Gallbladder (Anatomy & Physiology).pptx
The Liver &  Gallbladder (Anatomy & Physiology).pptxThe Liver &  Gallbladder (Anatomy & Physiology).pptx
The Liver & Gallbladder (Anatomy & Physiology).pptx
 
Rich Dad Poor Dad ( PDFDrive.com )--.pdf
Rich Dad Poor Dad ( PDFDrive.com )--.pdfRich Dad Poor Dad ( PDFDrive.com )--.pdf
Rich Dad Poor Dad ( PDFDrive.com )--.pdf
 

Sivan Co- manufactures and sells one product- For the year- they start (3).docx

  • 1. Sivan Co. manufactures and sells one product. For the year, they started with no opening inventory; produced 100,000 units, but only sold 70,000 units. The selling price per each unit is $70. The variable costs per unit were: Direct materials.........................7 Direct Labor .............................6 Variable manufacturing overhead....5 Variable selling and administrative Solution a) Variable costing Sales (70000 units X $ 70) = 4900,000 Less: Variable cost of goods sold [opening inventory nil Variable cost of goods produced (100000 X 18) = 1800,000 less closing inventory (30000 units X 18) = 540000] 1260,000 Gross profit (4900,000-1260000) =36,40,000 Less: Selling and administrative overhead Variable selling and administrative overhead ( 70000 X 6) 420000 Less : Period cost Fixed manufacturing overhead 700000
  • 2. Fixed selling and administrative overhead 300000 Net income =2220,000 note: 1.total variable cost = diect material+direct labor+variable maufacturing overhead = 7+6+5 = 18 2. closing inventory = 100000-70000 = 30000 b) Absorbtion costing Sales (70000 units X $ 70) = 4900,000 Less: Variable cost of goods sold [opening inventory nil Variable cost of goods produced  (100000 X 25) = 2500,000 less closing inventory (30000 units X 25) = 750,000] 17 50,000 Gross profit (4900,000 - 1750000) = 3150,000 Less: Selling and administrative overhead Variable selling and administrative overhead ( 70000 X 6) 420000 Fixed selling and administrative overhead 300000 Net income = 1030,000 note: 1. Manufacturing cost per unit total variable cost = diect material+direct labor+variable maufacturing overhead = 7+6+5 = 18 Fixed (700000/100000) = 7 25