Required information The following information applies to the questions displaye

Question

Required information The following information applies to the questions displayed below) Dowell Company produces a single product its income statements under absorption costing for its first two years of r 2 operation follow 2816 Sales ($46 per unit) Cost of goods sold ($31 per unit) Gross margin Selling and adeinistrative expenses Net incone $1,858,009 $1,978,899 713,000 1,333,800 45,800645,8ee 296,758 341,750 48,250 $ 303,250 Additional Information a. Sales and production datá for these first two years follow Units produced Units sold 33,800 33,000 23,8e0 43,800 b. Varable cost per unit and total fixed costs are unchanged during 2016 and 2017 The company's $31 per unit product cost consists of the following Direct materials Direct 1abor Variable overhead Fixed overhead ($33e,eeer33 Total product sost pen unis 18 531 ,e00 units) ype here to search

Explanation / Answer

Income Statement :-

2016

2017

Sales

1058000

1978000

Less:- Cost of Goods Sold

Direct Materials

138000

258000

Direct Labour

207000

387000

Variable O/H

138000

258000

Variable Selling & Admn Exp

51750

96750

Total Variable cost

534750

999750

Contribution Margin

523250

978250

Less:Fixed Exp

Fixed Selling & Admn Cost

245000

245000

Fixed O/H

330000

330000

Total Fixed Exp

575000

575000

Net Income(Loss)

(51750)

403250

2016

2017

Sales

1058000

1978000

Less:- Cost of Goods Sold

Direct Materials

138000

258000

Direct Labour

207000

387000

Variable O/H

138000

258000

Variable Selling & Admn Exp

51750

96750

Total Variable cost

534750

999750

Contribution Margin

523250

978250

Less:Fixed Exp

Fixed Selling & Admn Cost

245000

245000

Fixed O/H

330000

330000

Total Fixed Exp

575000

575000

Net Income(Loss)

(51750)

403250

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