Sibrel Inc., a manufacturing company, has provided the following financial data
ID: 2374795 • Letter: S
Question
Sibrel Inc., a manufacturing company, has provided the following financial data for September:
Sales...................................................$590,000
Variable production expenses............$106,000
Variable selling expense.....................$18,000
Variable administrative expense.........$78,000
Fixed production expense...................$145,000
Fixed selling expense.........................$72,000
Fixed administrative expense.............132,000
The company had no beginning or ending inventories.
Required:
a) Prepare an income statement in good form for September using the traditional approach.
b) Prepare an income statement in good form for September using the contribution approach.
Explanation / Answer
Income Statement using Traditional approach:-
Variable Expenses
Production expenses........................ 106,000
Selling Expense...................................18,000
Adminstrative Expenses......................78,000
Total...................................................................202,000
Fixed expenses
Production expenses.........................145,000
Selling expenses.................................72,000
Adminstrative expenses....................132,000
Total..................................................................349,000
Grand total........................................................551,000
Sales.................................................................590,000
Profit....................................................................39,000
Income Statement using Contribution approach:-
Sales.( A )..........................................................590,000
Less:- Variable expenses
Production...............106,000
Selling.......................18,000
Administrative...........78,000
Total( B )............................................................202,000
Contribution ( A - B)........................................388,000
Less:- Fixed expenses
Production.............145,000
Selling.....................72,000
Administrative.......132,000
Total..................................................................349,000
Profit.( Contribution - Fixed expenses )..........39,000
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.