Help Sav Sims Company, a manufacturer of tablet computers, began operations on J
ID: 2556078 • Letter: H
Question
Help Sav Sims Company, a manufacturer of tablet computers, began operations on January 1, 2017. ts cost and sales information for this year Sims Company, a manufacturer of tablet computers, began operations on January 1, 2017 sales information Direct mnaterials Direct labor 35 per unit 55 per unit 13 Overhead costa for the year Variable overhead P ixed $2,200,000 $8, 800,000 or the Pixed Production and sales for the year s 750,000 $4,250,000 Units sold Sales price per unit 110,000 units 80,000 units 350 per unit 1. Prepare an income statement for the year using variable costing. 2. Prepare an income statement for the year using absorption costing. 3. Under what circumstance(s) is reported income identical under both absorption costing and variable costing? Complete this question by entering your answers in the tabs belowExplanation / Answer
1. Variable costing income statemet:
2. Absorption costing income statement:
3.
If number of goods produced is idetical to umber of goods sold, net income would be identical in both abosrption and variable costing income statement.
S Company Variable costing income statement Details Amount Amount Sales $ 28,000,000 Less: Variable Cost of goods sold: Opening inventory $ - Add variable Cost of goods manufactured $ 8,800,000 Variable Cost of goods available for sale $ 8,800,000 Less: Closing inventory $ -3,300,000 $ 5,500,000 Gross contribution margin $ 22,500,000 Less: Variable selling and administrative expenses $ -750,000 Contribution margin $ 21,750,000 Less Period expenses Fixed manufacturing overhead expenses $ 8,800,000 Fixed marketing and administrative expenses $ 4,250,000 $ 13,050,000 Net operating income $ 8,700,000Related Questions
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