Brief Exercise 134 During 2016, Basler Manufacturing produced 60,000 units and s

Question

Brief Exercise 134

During 2016, Basler Manufacturing produced 60,000 units and sold 55,000 for $10 per unit. Variable manufacturing costs were $4 per unit. Annual fixed manufacturing overhead was $120,000 ($2 per unit). Variable selling and administrative costs were $1 per unit sold, and fixed selling and administrative costs were $30,000.

Prepare a variable costing income statement.

BASLER MANUFACTURING
Income Statement (Variable Costing)

Net Income / (Loss)Variable Cost of Goods SoldFixed Manufacturing OverheadFixed Selling and Administrative ExpensesRevenuesSalesVariable Selling and Administrative ExpensesContribution Margin

$

RevenuesVariable Cost of Goods SoldNet Income / (Loss)Variable Selling and Administrative ExpensesFixed Manufacturing OverheadFixed Selling and Administrative ExpensesContribution MarginSales

$

Fixed Manufacturing OverheadFixed Selling and Administrative ExpensesSalesVariable Selling and Administrative ExpensesNet Income / (Loss)RevenuesVariable Cost of Goods SoldContribution Margin

RevenuesVariable Selling and Administrative ExpensesContribution MarginSalesFixed Manufacturing OverheadFixed Selling and Administrative ExpensesVariable Cost of Goods SoldNet Income / (Loss)

Net Income / (Loss)Variable Cost of Goods SoldRevenuesFixed Manufacturing OverheadSalesVariable Selling and Administrative ExpensesContribution MarginFixed Selling and Administrative Expenses

Variable Cost of Goods SoldContribution MarginSalesNet Income / (Loss)RevenuesVariable Selling and Administrative ExpensesFixed Manufacturing OverheadFixed Selling and Administrative Expenses

SalesFixed Manufacturing OverheadNet Income / (Loss)Variable Cost of Goods SoldRevenuesFixed Selling and Administrative ExpensesVariable Selling and Administrative ExpensesContribution Margin

$

Explanation / Answer

Sales (55,000 × $10) $550,000

Variable cost of goods sold (55,000 × $4) $220,000

Variable selling and administrative expenses (55,000 × $1) 55,000 275,000

Contribution margin 275,000

Fixed manufacturing overhead 120,000

Fixed selling and administrative expenses 30,000 150,000

Net Income $125000

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