is this correct. i keep confusing myself. Aces Inc., a manufacturer of tennis ra

Question

is this correct. i keep confusing myself.

Aces Inc., a manufacturer of tennis rackets, began operations this year. The company produced 6,800 rackets and sold 5,700. Each racket was sold at a price of $98. Fixed overhead costs are $93,840 and fixed year selling and administrative costs are $66,000. The company also reports the following per unit costs for the Variable production costs Variable selling and administrative expensesS 280 $25.80 Required: Prepare an income statement under variable costing ACES INC. Variable Costing Income Statement Sales 558,600 Less: Variable costs Variable production costs Variable selling and administrative expenses s 147.060 78,990 Total variable costs Contribution margin Less: Fixed expenses 226,050 332,550 Fixed selling and administrative costs Fixed overhead costs $ 15,960 66,000 Tolal fixed expenses Net income loss) 81,960 S 250,920 O Type here to search

Explanation / Answer

Answer:- No, the solution is not correct. The right solution is as follows:-

Aces Inc. Income statement using variable costing Particulars Amount $ Sales (a) 5700 units*$98 per unit 558600 Less:- Variable cost of goods sold (b) Opening inventory Add:- Variable cost of goods manufatured 6800 units*25.80 per unit 175440 Variable cost of goods available for sale 175440 Less:- Closing inventory 1100 units*$25.80 per unit 28380 147060 Gross contribution margin C= a-b 411540 Less:-Variable selling expenses 5700 units*$2.80 per unit 15960 Contribution margin 395580 Less:- Period Expenses Fixed overhead costs 93840 Fixed Selling & Administrative overhead 66000 Net Opreating Income 235740

Related Questions

Navigate

• Browse (All)
• Browse I
• Subjects

---

---

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