High Country, Inc., produces and sells many recreational products. The company h
ID: 2416707 • Letter: H
Question
High Country, Inc., produces and sells many recreational products. The company has just opened a new plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month of the plant’s operation:
Management is anxious to see how profitable the new camp cot will be and has asked that an income statement be prepared for May.
Prepare an income statement for May
.
High Country, Inc., produces and sells many recreational products. The company has just opened a new plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month of the plant’s operation:
Explanation / Answer
Income statment under absorption costing
Sales (31,000*83) $2,573,000
less:Cost of goods sold (31,000*48) 1,488,000
Gross profit 1,085,000
Less:Fixed expense
Variable selling (31,000*4) 124,000
Fixed selling 563,000
Net income $398,000
Unit cost under vairbale $29
Sale $2,573,000
less:COGS(31,000*29) 899,000
Selling variable 124,000
Contribution income $1,550,000
less:Fixed manufactuirng 684,000
Fixed selling 563,000
Net income $303,000
Direct materails $18 Direct labor 9 Variable expense 2 Fixed manufacturing cost 684,000/36,000 19 unit product cost $48Related Questions
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