Throughput costing, absorption costing, and variable costing
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Adelphia Corporation which uses throughput costing, just completed its first year of peration.l Planner and actual production equaled 10,000 units and sales totaled 9,600 units at $216 per unit. Cost data for the year are as followed:
Direct material (per unit) 36.00
Coversion costs
Direct labor 135,000
Variable manufacturing overhread 195,000
Fixed manufacturing overhead 660,000
Selling and adminstrative costs
Variable (per unit) 24
Fixed 354,000
1. Compute the company;'s total cost for the year assuming that the variable manufacturing costs are driven by the number of units produced, and variable selling and adminstrative costs are driven by the number of units sold.
2. How much of this cost would be held in the year-end inventory under (a) absorption costs, b) variable costing c) throughput costing
3. How much of the company's total cost for the year would be included as an expense on the periods income statement under a) absorptation costing b) variable costings and c) throughput costing
4. Prepare Adelphia throughout costing income statment
5. Build a spreadsheet: Construct an excel spreadsheet to solve requirements 1 and 2 above. Show how the solution will change if the following information changes: the direct material costs is $35 per unit and the total direct labor cost is $130,000.
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Solution Summary
The solution explains some calculations relating to throughput costing, absorption costing, and variable costing
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