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FM and vM costs are asset costs expensed when the asset is sold.
FNP and vNP costs are period expenses.
Assumptions:
process manufacturing, single product company
constants:
FM = 6,000
FNP = 3,500
vM = 40
vNP = 10
p = 300
CQ = 150
units
BQ
0
20
10
period
1
2
3
PQ
100
80
60
SQ
80
90
60
EQ
20
10
10
3
60
18,000
fM = 6,000 / PQ
$60
$75
$100
Solution:
FIFO
SQ
revenue
period
1
80
$
24,000
2
90
27,000
24,000
27,000
18,000
24,000
27,000
18,000
EQ
20
10
10
3
60
18,000
$
$
$
$
$
total
230
69,000
69,000
69,000
$
$
$
$
$
total
230
69,000
69,000
69,000
$
$
total
230
69,000
-
$
$
$
69,000
69,000
EQC
average cost
SQ
revenue
period
1
80
$
24,000
2
90
27,000
24,000
27,000
18,000
24,000
27,000
18,000
EQ
20
10
10
3
60
18,000
EQC
LIFO
SQ
revenue
period
1
80
$
24,000
2
90
27,000
24,000
27,000
18,000
24,000
27,000
18,000
EQ
20
10
10
EQC
1 OF 3
1/9/2014
Period 1 Solution
FIFO
SQ
revenue
cost of goods sold
period
1
80
$
24,000
$
8,000
$
$
$
16,000
4,300
11,700
EQC
20
2,000
average cost
period
1
80
$
24,000
$
8,000
gross margin
non product cost
income
EQ
SQ
revenue
cost of goods sold
$
$
$
16,000
4,300
11,700
20
2,000
$
$
$
$
$
period
1
80
24,000
8,000
16,000
4,300
11,700
20
2,000
$
$
$
$
period
1
80
24,000
8,000
16,000
4,300
income
gross margin
non product cost
income
EQ
EQC
LIFO
SQ
revenue
cost of goods sold
gross margin
non product cost
income
EQ
EQC
2
90
27,000
3
60
18,000
27,000
18,000
27,000
18,000
10
10
2
90
27,000
3
60
18,000
27,000
18,000
27,000
18,000
10
10
2
90
27,000
3
60
18,000
27,000
18,000
27,000
18,000
10
10
$
$
$
$
2
90
27,000
10,050
16,950
4,400
3
60
18,000
18,000
11,700
12,550
18,000
20
2,000
10
1,150
10
$
$
$
$
$
period
1
80
24,000
8,000
16,000
4,300
11,700
$
$
$
$
$
2
90
27,000
10,080
16,920
4,400
12,520
3
60
18,000
18,000
18,000
20
2,000
10
1,120
$
$
total
230
69,000
8,000
$
$
$
61,000
4,300
56,700
$
$
total
230
69,000
8,000
$
$
$
61,000
4,300
56,700
$
$
$
$
$
total
230
69,000
8,000
61,000
4,300
56,700
$
$
$
$
total
230
69,000
18,050
50,950
8,700
42,250
$
$
$
$
$
total
230
69,000
18,080
50,920
8,700
42,220
FIFO
SQ
revenue
cost of goods sold
gross margin
EQ
EQC
average cost
SQ
revenue
cost of goods sold
gross margin
non product cost
income
EQ
EIC
2 OF 3
10
1/9/2014
LIFO
$
$
$
$
$
period
1
80
24,000
8,000
16,000
4,300
11,700
$
$
$
$
$
2
90
27,000
10,200
16,800
4,400
12,400
20
2,000
10
1,000
10
period
1
80
$
24,000
$
8,000
$
$
2
90
27,000
10,050
$
$
$
16,000
4,300
11,700
$
$
$
20
2,000
$
$
$
$
$
total
230
69,000
18,200
50,800
8,700
42,100
$
$
3
60
18,000
8,150
$
$
total
230
69,000
26,200
16,950
4,400
12,550
$
$
$
9,850
4,100
5,750
$
$
$
42,800
12,800
30,000
10
1,150
10
1,400
$
$
$
$
$
period
1
80
24,000
8,000
16,000
4,300
11,700
$
$
$
$
$
2
90
27,000
10,080
16,920
4,400
12,520
$
$
$
$
$
3
60
18,000
8,160
9,840
4,100
5,740
$
$
$
$
$
total
230
69,000
26,240
42,760
12,800
29,960
EQC
20
2,000
10
1,120
10
1,360
LIFO
period
1
80
$
24,000
$
8,000
$
$
2
90
27,000
10,200
$
$
3
60
18,000
8,400
$
$
total
230
69,000
26,600
$
$
16,000
4,300
$
$
16,800
4,400
$
$
9,600
4,100
$
$
42,400
12,800
income
11,700
12,400
5,500
29,600
20
2,000
10
1,000
10
1,000
SQ
revenue
cost of goods sold
gross margin
non product cost
income
EQ
EQC
3
60
18,000
18,000
18,000
FIFO
SQ
revenue
cost of goods sold
gross margin
non product cost
income
EQ
EQC
average cost
SQ
revenue
cost of goods sold
gross margin
non product cost
income
EQ
SQ
revenue
cost of goods sold
gross margin
EQ
EQC
3 OF 3
1/9/2014