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    Paint Moore LLC

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    Paint More LLC has organized a new division to manufacture and sell specialty paint. The division's monthly costs are shown below:

    Manufacturing costs:
    Variable costs per unit:
    Direct materials $12
    Variable manufacturing overhead $1
    Fixed manufacturing overhead costs (total) $100,000
    Selling and administrative costs:
    Variable 7% of sales
    Fixed (total) $31,000

    Because the production is highly automated, the company includes its labor costs in its fixed manufacturing overhead. The gallons of paint sell for $68 each. During September, the first month of operations, the following activity was recorded:

    Units produced 5,000
    Units sold 4,000

    Submit an Excel document which each tab labeled by item number in good form that demonstrates the following:
    Compute the unit product cost under:
    Absorption costing
    Variable costing
    Prepare an absorption costing income statement for September
    Prepare a contribution format income statement for September using variable costing

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    Solution Preview

    Dear student,
    Solution is provided in a separate excel file attached under the following parts.

    1 Data used in the problem

    2 Statement of unit cost analysis under Variable and absorption costing.

    3 Income statement under Absorption costing

    4 Income statement (Contribution format) under Variable costing

    5 Explanatory Notes: ...

    Solution Summary

    The new division to manufactures for costs are examned.