High Country, Inc., produces and sells many recreational products. The company 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 a contribution format income statement for May.

So far I have this: If there is a " * " and in bold, then the name/number/both are incorrect.

Beginning Inventory 0 Units Produced 45,000 Units Sold 40,000 Selling Price Per Unit $81 Selling & Administrative Expenses: Variable per unit $3 Fixed per month $566,000 Manufacturing Costs: Direct materials cost per unit $17 Direct labor cost per unit $6 Variable manufacturing overhead cost per unit $2 Fixed manufacturing overhead cost per month $855,000

Explanation / Answer

Sales 3240000 Variable Exp Indirect Material ( 17*45000) 765000 Labour (6*45000) 270000 Variable Mfg OHD (2*45000) 90000 1125000 Less Closing Stock (25*5000) -125000 Variable Production Cost (40000 units) 1000000 Variable Sell/adm exp 120000 Total Variable Cost of Sales 1120000 CM 2120000 Fixed Exp Fixed Mfg OHD 855000 Fixed sll/adm OHD 566000 1421000 Net Operating Income 699000

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