onvilrr/takeAssignment/takeAssignmentMain do?inwoker assignments&takeAssignn; oc
ID: 2589262 • Letter: O
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onvilrr/takeAssignment/takeAssignmentMain do?inwoker assignments&takeAssignn; ocator-assignment-takeinprogress-false Calculator On lanuary 1 of the arrent year, Townsend Co. corn nenod operations. It operated its plant at 100% of capacit January: y during January. The following data summarized the results for Units Production Sales ($18 per unit) Inventory, January 31 50,000 42,000 8,000 Manufacturing costs varial‰ $575,000 80,000 $655,000 Fixed Total Selling and admanistrative expenses: 35,000 10,500 Variable Fixed Total $45,500 a, 4 are an income statement using absorption ootrg. Townsend Co. Absorption Costing Income Statement PreviousExplanation / Answer
SOLUTION:
PART-1)
Absorption Costing Income Statement
Sales
756,000
COGS:
Cost of goods manufactured
655,000
Less inventory, January 31
104,800
COGS
550,200
Gross profit
205,800
Minus: selling and administrative expenses
45,500
Income from operations
160,300
PART-2)
Variable Costing Income Statement
Sales
756,000
Variable COGS
Variable cost of goods manufactured
575,000
Minus: inventory, January 31
92,000
Variable cost of goods sold
483,000
Manufacturing margin
273,000
Variable selling and administrative expense
35,000
Contribution margin
238,000
Fixed cost:
Fixed manufacturing costs
80,000
Fixed selling and administrative expenses
10,500
-90,500
Income from operations
147,500
Absorption Costing Income Statement
Sales
756,000
COGS:
Cost of goods manufactured
655,000
Less inventory, January 31
104,800
COGS
550,200
Gross profit
205,800
Minus: selling and administrative expenses
45,500
Income from operations
160,300
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