xam 3 (Chapters 6 and 7) Income Statements under Absorption and Variable Costing

Question

xam 3 (Chapters 6 and 7) Income Statements under Absorption and Variable Costing Shawnee Motors Inc. assembles and sels MP3 players. The company began operations on August 1 and operated at 100% of capacity during the first month. The following data summarize the results for August Sales (9,500 units) Production costs (12,000 units) $1,045,000 Direct materials Direct labor Variable factory overhead Flxed factory overhead $488,400 234,000 117,600 78,000 918,000 Selling and administrative expenses: Variable selling and administrative expenses 142,300 Fixed selling and administrative expenses 55,100 17,400 If required, round interim per-unit calculations to the nearest cent. a. Prepare an income statement according to the absorption costing concept Shawnee Hotors Inc Absorption Costing Income Statement For the Month Ended August 31 b. Prepare an income statement according to the variable costing concept. Shawnee Motors Inc. Previous Next Remaining: 2:54:04 All work saved Email Instructor Submit Test for Gradi Type here to search

Explanation / Answer

Please hit LIKE button if this helped. For any further explanation, please put your query in comment, will get back to you. Variable Costing Sales 1045000 Less: Variable Cost of goods sold: Beginning Inventory 0 Add: Variable cost of goods manufactured 12000*70 840000 Variable cost of goods available for sale 840000 Less: Ending inventory (12000-9500)*70 175000 665000 Gross Contribution Margin 380000 Less: Variable Selling and Admin Expense 142300 Contribution Margin 237700 Less: Fixed Cost Fixed Manufacturing Overhead 78000 Fixed Selling and Admin Expense 55100 133100 Net Operating Income/(loss) 104600 Variable Manufacturing Cost: Direct Material 488400 Direct Labor 234000 Variable Overhead 117600 Total Variable Cost 840000 Units Produced 12000 Per Unit Variable Cost 70 Absorption Costing: Sales 1045000 Less: Cost of Goods Sold 918000/12000*9500 726750 Gross Margin 318250 Less: Selling and administrative Expense 197400 Net Income/(Loss) 120850 Part c Absorption Costing Variable Costing Absorption Costing

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