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HOW/Hide Comment Spelling Research Thesaurus TranslateNew Delete Previous Next Show All Comments Changes Comment Proofing Language Comments A1 fAddison, Inc. makes a single product, an indoor fireplace. Data for 1 Addison, Inc, makes a single product, an indoor fireplace. Data for last year is as follows: 3 Selling price per fireplace 4 Manufacturing costs: $420 5 Variable per unit produced: 6 Direct materials 7 Direct labor $135 $43 $37 $210,000 8 Variable manufacturing overhead 9 Fixed manufacturing overhead per year 10 Selling and administrative expenses: 11 Variable per unit sold $45 $190,000 12 Fixed per year 13 0 5,000 4,500 14 Units in beginning inventory 15 Units produced during the year 16 Units sold during the year 17 18 Use the data to answer the following. 19 20 1. Assume the company uses variable costing: 21 a Congrute be na rdic cns for an rp 23 24 Prepare a contribution margin income statement for the year Sheet1 ..Explanation / Answer
Compute the Variable costing Unit Product cost Year 1 Direct Material 135 Direct labour 43 Variable Manufacturing overheads 37 Variable costing unit prroduct cost 215 Construct The Variable Costing Income Statement under FIFO YEAR 1 Sales 1,890,000 Less: Variable cost variable cost of goods sold 967,500 Variable selling expense 202,500 1,170,000 Contribution margin 720,000 Fixed expense: Fixed Manufacturing overheads 210,000 Fixed selling expense 190,000 Net operating Income 320,000 Construct The Absorption Costing Unit Product Cost Year 1 Direct Material 135 Direct labour 43 Variable Manufacturing overheads 37 Fixed Manufacturing overheads 42.00 Absorption costing unit prroduct cost 257.00 Construct the Absorption Costing Income Statement Under FIFO Year 1 Sales $1,890,000 Cost of Goods sold 1156500 Gross Margin $733,500 Selling and distribution expense 392,500 Net operating income 341,000
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