During 2013, Basler Manufacturing produced 60,000 units and sold 55,000 for $10

Question

During 2013, 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

During 2013, 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 an absorption costing income statement.

Explanation / Answer

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BASLER MANUFACTURING Incomr Statement (Variable Costing) Particulars $ $ Sales(55,000 units*$10per unit) 550,000 Variable cost of goods sold(55000units*$4)    220,000 Variable selling & administrative expense(55000units*$1)      55,000 275,000 Contribution Margin 275,000 Fixed Manufacturing Overhead    120,000 Fixed selling & administrative expense      30,000 150,000 Net Income 125,000

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