Ziska Engineering Prepares Its Internal Reports Using Standard Costing Within

Essay

Ziska Engineering prepares its internal reports using standard costing within its variable costing system. As a result, the company writes off any variances directly to COGS. The company has continued to see growth over the last five years but feels it will become stagnant if it can't meet its budgeted production level due to a disrupted supply chain. Information to make and sell 1,300 units of its design plans are as follows: Actual costs came in as budgeted. However, the company only produced 1,150 units and sold 1,200 units at a selling price of $110 per unit. The company began the year with 250 units, and its standard product costs per unit were the same last year as they were this year. Instructions
a.Calculate the cost per unit that Ziska will capitalize into inventory this year.
b.Calculate how many units were in ending FG inventory this year and the total cost that will be capitalized on the balance sheet.
c.Present Ziska's current year income statement, in good form, using variable costing.
d. Last year, the company reported an operating income of $24,200. Comment on whether management will be pleased with the current year's performance.