E21-16 (similar to Question Help Vita Ade produced 16,000 cases of powdered drin

Question

E21-16 (similar to Question Help Vita Ade produced 16,000 cases of powdered drink mix and sold 14,000 cases in April 2018. The sales price was $24, variable costs were $9 per case (57 manufacturing and $2 selling and administrative), and total fixed costs were $95,000 (S80,000 manufacturing overhead and $15,000 selling and administrative). The company had no beginning Finished Goods Inventory. Read the reqvirements Requirement 1. Prepare the April income statement using variable costing. Vita Ade Income Statement (Variable Costing) Month Ended April 30, 2018 Requirements 1. Prepare the April income statement using variable costing. 2. Determine the product cost per unit and the total cost of the 2,000 cases in Finished Goods Inventory as of April 30 Print Done Operating Income Choose from any list or enter any number in the input fields and then click Check Answer

Explanation / Answer

Prepare income statement under variable costing :

2) Unit product cost under variable costing = 7 per unit

ENding inventory cost = 7*2000 = 14000

Sales (14000*24) 336000 Variable cost Variable cost of goods sold (14000*7) (98000) Variable selling and administrative expense (14000*2) (28000) (126000) Contribution margin 210000 Fixed cost Fixed manufacturing overhead (80000) Fixed selling and administrative expense (15000) (95000) Net operating income 115000

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