I NEED HELP FINISHING # 2 AND #3 Security Technology Inc. (STI) is a manufacture

Question

I NEED HELP FINISHING # 2 AND #3

Security Technology Inc. (STI) is a manufacturer of an electronic control system used in the manufacture of certain special-duty auto transmissions used primarily for police and military applications. The part sells for $63 per unit and had sales of 24,400 units in the current year, 2015. STI has no inventory on hand at the beginning of 2015 and is projecting sales of 27,200 units in 2016. STI is planning the same production level for 2016 as in 2015, 25,800 units. The variable manufacturing costs for STI are $24 and the variable selling costs are only $0.60 per unit. The fixed manufacturing costs are $180,600 per year and the fixed selling costs are $580 per year Required 1. Prepare an income statement for each year using full costing. (Round your final answers to nearest whole dollar amount.) SECURITY TECHNOLOGY INC Full Costing Income Statement 2015 2016 Sales $ 1,537,200 $ 1,713,600 Less: Cost of goods sold Beginning inventory $43,400 Cost of production Available for sale Less ending inventory 799,800 799,800 43,400 799,800 843,200 Cost of goods sold 756,400 $780,800 843,200 $ 870,400 Gross margin Less selling and administrative costs 14,640 580 16,320 580 Variable Fixed 15,220 $765,580 16,900 $ 853,500 Operating income

Explanation / Answer

income statement 2015 2016 Sales 1,537,200 1,713,600 less:cost of goods sold cost of production Beginning inventory 0 33,600 cost of production 619200 619,200 available for sale 619200 652,800 less:Ending inventory 33600 0 cost of goods sold 585600 652,800 variable selling & adm cost 14640 16,320 contribution margin 936,960 1,044,480 less:fixed costs fixed manufacturing costs 180,600 180,600 fixed selling & adm costs 580 580 181,180 181,180 operating income 755,780 863,300 3) 2015 2016 Change in inventory in units 1,400 1,400 multiply times fixed overhead rate 7 7 difference in operating income 9,800 9,800 income under variable costing 755,780 863,300 FOH deferred in ending inventory 9,800 FOH released in beginning inventory -9,800 income under absorption costing 765,580 853,500

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