please help solve Lenowo Mylab & Mastering M Mcr- Cone indicete complation. Chec

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Lenowo Mylab & Mastering M Mcr- Cone indicete complation. Check my work mode : This sh whet is correct or incorrect for the work you have completed so far. It does not Return to qustion Exercise 6-4 Variable costing income statement LO P2 Kenzi Kayaking, a manufacturer of kayaks, began operations this year. During this first year the company produced 1000 kayaks and sold 750 at a price of $t000 each At this first year end the company reported the following income statement information using absorption costing s 750,900 Cost of goods sold (7505475) Gross nargin Selling and administrative expenses Net income 393,758 248 900 s 153,750 Additional information amount is based on $100.000 of fixed production costs allocated to the 1,000 koyaks produced b. The $240.000 in seling and scoministrstive expense consists of $95 000 that is variable and $145,000 that s fixed e. Product cost per kayak totals $475, which consists of $375 in variable production cost and S100 in fixed production cost-the later Required 1 Prepare an income stetement for the current year under variable costing 1 cf

Explanation / Answer

KENZI KAYAKING Variable Costing Income Statement Particulars Amount $ Amount $ Sales (750 units @ $1,000) $ 750,000 Less: Variable costs Variable production costs (750 x $375/ unit) $ 281,250 Variable selling and administrative       95,000 Total variable costs      376,250 Contribution margin 373,750 Less: Fixed expenses Fixed selling and administrative     145,000 Fixed overhead     100,000 Total fixed costs      245,000 Net income (loss)      128,750 Net income under absorption costing      153,750 Net income under absorption costing is higher than net income under variable costing by        25,000 Fixed Cost added to inventory ( 1000-750) x (100000/1000)=>250 x 100 $    25,000

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