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    Managerial Accounting: Hamilton Stage Supplies Costing

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    Managerial Accounting, Third Edition by James Jiambalvo
    "Solving Managerial Accounting Problems Using Microsoft Excel or Windows Templates by Rex A Schildhouse"

    Problem P5-2 Variable and Full Costing: Sales Constant but Production Fluctuates
    Hamilton Stage Supplies is a manufacturer of a specialized type of light used in theaters. Information on the first three years of business is as follows:

    2008 2009 2010 Total
    Units sold 2,000 2,000 2,000 6,000
    Units produced 2,000 3,000 1,000 6,000
    Fixed production costs $30,000 $30,000 $30,000
    Variable production costs per unit 50 50 50
    Selling price per unit 200 200 200
    Fixed selling and administrative 4,000 4,000 4,000
    expense

    Required:
    Part a: Calculate profit and the value of ending inventory for each year using full costing.
    2008 2009 2010
    Fixed manufacturing overhead Amount Amount Amount
    Divided by units produced Number Number Number
    Title Formula Formula Formula
    Title Amount Amount Amount
    Full cost per unit Formula Formula Formula

    Sales Amount Amount Amount
    Less ???
    2008 Formula
    2009 Formula
    2010 Formula
    Less ??? Amount Amount Amount
    Net income Formula Formula Formula Formula

    Ending inventory 2008 Value
    Ending inventory 2009 Value
    Ending inventory 2010 Value

    Part b: Explain why profit fluctuates from year to year even though the number of units sold, the selling price, and the cost of structure remain constant.

    Written response here.

    Part c: Calculate profit and the value of ending inventory for each year using variable costing.

    2008 2009 2010
    Fixed manufacturing overhead Amount Amount Amount
    Title Amount Amount Amount

    Sales Amount Amount Amount
    Title Amount Amount Amount
    Title Formula Formula Formula
    Less fixed costs:
    Title Amount Amount Amount
    Title Amount Amount Amount
    Net income Formula Formula Formula Formula

    Ending inventory 2008 Value
    Ending inventory 2009 Value
    Ending inventory 2010 Value

    Part d: Explain why, using variable costing, profit does not fluctuate from year to year.
    Written response here.

    © BrainMass Inc. brainmass.com June 3, 2020, 11:19 pm ad1c9bdddf
    https://brainmass.com/business/accounting/managerial-accounting-hamilton-stage-supplies-costing-273215

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    Solution Summary

    The solutions computes profit, cost under variable costing & full costing for Hamilton Stage Supplies in excel sheet.

    $2.19

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