Purchase Solution

Hughes Satellite Corp. Variable costing

Not what you're looking for?

Ask Custom Question

Hughes Satellite Corp. manufactures satellite dishes used in residential and commercial applications. For each unit the following costs apply: $50 for direct materials, $100 for direct labor, and $60 for variable overhead. The company's annual fixed overhead cost is $750,000; it uses expected capacity of 12,500 units produced as the basis for applying fixed overhead to products. A commission of 10% of the selling price is paid on each unit sold. Annual fixed selling and administrative expenses are $180,000. The following additional information is available:

2010 2011
Selling price per unit $500 $500
Number of units sold 10,000 12,000
Number of units produced 12,000 11,000
Beginning inventory (units) 7,500 10,000
Ending inventory (units) 10,000 ?

1. Assume the company uses absorption costing.
A. Compute the unit product cost in each year.
B. Prepare an income statement for the year.

2. Assume the company uses variable costing.
A. Compute the unit product cost in each year.
B. Prepare an income statement for the year.

Purchase this Solution

Solution Summary

Your tutorial is in Excel (attached). Click in cells to see computations.

Your tutorial creates a traditional income statement (absorption costing) and a contribution margin income statement (variable costing) as well as showing how the cost per unit is determined. The applied versus actual fixed overhead is analyzed.

Solution Preview

Your tutorial is in Excel (attached). Click in cells to see ...

Solution provided by:
Education
  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
Recent Feedback
  • "hey just wanted to know if you used 0% for the risk free rate and if you didn't if you could adjust it please and thank you "
  • "Thank, this is more clear to me now."
  • "Awesome job! "
  • "ty"
  • "Great Analysis, thank you so much"
Purchase this Solution


Free BrainMass Quizzes
Academic Reading and Writing: Critical Thinking

Importance of Critical Thinking

Income Streams

In our ever changing world, developing secondary income streams is becoming more important. This quiz provides a brief overview of income sources.

Introduction to Finance

This quiz test introductory finance topics.

Situational Leadership

This quiz will help you better understand Situational Leadership and its theories.

Paradigms and Frameworks of Management Research

This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.