Brock Company produces and sells an industrial product. The company has just ope

Question

Brock Company produces and sells an industrial product. The company has just opened a new plant to manufacture the product, and the following cost and revenue data have been provided for the first month of the plant’s operation.

Prepare an income statement for the month. (Input all amounts as positive values except losses which should be indicated by a minus sign.)

Prepare a contribution format income statement for the month. (Input all amounts as positive values except losses which should be indicated by a minus sign.)

Brock Company produces and sells an industrial product. The company has just opened a new plant to manufacture the product, and the following cost and revenue data have been provided for the first month of the plant’s operation.

Explanation / Answer

Brock Company All Amounts in $ 1. Under Absorption Costing Method Variable Costs Direct Materials 16 Direct Labor 9 Manufacturing Overheads 3 Selling and Administrative Expenses 3 31.0 Fixed Costs Manufacturing Overheads per unit produced 16 Selling and Administrative Expenses per unit produced 12.24 28.24 a. Total Cost per unit produced 59.24 b. Income Statement for the month under Absorption Costing Sales = 41,000 Units X $ 81 3321000 Cost of Goods Sold = 41,000 units X $ 44 1804000 Contribution Margin 1517000 Selling and Administrative Expenses = 41,000 units X $ 15.24 624840 Net Operating Income 892160 2. Under Variable Costing Method a. Cost per unit produced = 31.0 $ b. Income Statement for the month under Variable Costing Sales = 41,000 Units X $ 81 3321000 Cost of Goods Sold = 41,000 units X $ 31 1271000 Contribution Margin 2050000 Fixed Expenses 1299000 Net Operating Income 751000

Related Questions

Navigate

• Browse (All)
• Browse B
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.