ezto.mheducation.com Chapter 6 home work instructions I help Question 3 (of 3) s

Question

ezto.mheducation.com Chapter 6 home work instructions I help Question 3 (of 3) save &Eit; Submit value: 40.00 points Whitman Company has just completed its first year of operations. The company's absorption costing income statement for the year appears below: Whitman Company Income Statement Sales (39,000 units $42.10 per unit) Cost of goods sold (39,000 units $21 per unit) $1,641,900 819,000 Gross margin Selling and administrative expenses 822,900 448,500 Net operating income $ 374,400 The company's selling and administrative expenses consist of S292,500 per year in fixed expenses and $4 per unit sold in variable expenses. The $21 per unit product cost given above is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead ($245,000 49,000 units) Absorption costing unit product cost $21 Required 1. Prepare the company's income statement in the contribution format using variable costing. Whitman Company Variable Costing Income Statement ales S 1,641,900 Variable expenses: Beginning merchandise inventory Indirect materials Indirect labor 441,000 196,000

Explanation / Answer

1) Variable costing income statement :

2) Reconcile :

Sales 1641900 Variable cost of goods sold (16*39000) (624000) Manufacturing margin 1017900 Variable selling and administrative expense (156000) Contribution margin 861900 Less; Fixed cost Fixed manufacturing overhead (245000) Fixed selling and administrative expense (292500) (537500) Net operating income 324400

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

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