Bionic Cotton Inc. manufactures and sells high-quality sporting goo s equipment

Question

Bionic Cotton Inc. manufactures and sells high-quality sporting goo s equipment under its niy reco nizable co Cat The company began operations on January 2 n and perated at 0% capacity (82,000 units) during the first month, creating an ending inventory of 8,000 units. During February, the company produced 74,800 garments during the month but sold 82,800 units at $102 per unit. The February manufacturing costs and selling and administrative expenses were as follows Number of Units Unit Cost Total Cost Manufacturing costs in February beginning inventory: $52 416,000 8 64,000 $60 $480,000 Variable 8,000 Fixed Total February manufacturing costs: Variable 8,000 74,800 $52 $3,889,600 10 748,000 S62 $4,637,600 74,800 Total Selling and administrative expenses: Variable Fixed Total 1,340,000 324,000 $1,664,000 Required:

Explanation / Answer

Absorbtion Costing Income Statement sales 8445600 Cost of goods sold Beginning Inventory (8000*60) 480000 Cost of goods manufactured 4637600 Cost of goods sold 5117600 Gross Profit 3328000 Selling and Admin Expense 1664000 Income from Operation 1664000 Variable Costing income Statement sales 8445600 Variable Cost of good sold (82800*52) 4305600 Manufacturing Margin 4140000 Variable selling and admin expenes 1340000 Contribution Margin 2800000 Fixed Cost Manufacturing 748000 selling and admin expenes 324000 1072000 Income from Operation 1728000

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