# Managerial Accounting: Hamilton Stage Supplies Costing

See attached file.

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.

https://brainmass.com/business/accounting/managerial-accounting-hamilton-stage-supplies-costing-273215

#### Solution Summary

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