During the first month of operations ended July 31, YoSan Inc. manufactured 11,1
ID: 2791356 • Letter: D
Question
During the first month of operations ended July 31, YoSan Inc. manufactured 11,100 flat panel televisions, of which 10,400 were sold. Operating data for the month are summarized as follows:
Required:
1. Prepare an income statement based on the absorption costing concept.
Feedback
1. Sales - (cost of goods manufactured - ending inventory*) = Gross profit; gross profit - selling and administrative expenses = income from operations.
* (Manufactured Units - Sold units) x (total manufacturing costs/manufactured units)
Learning Objective 1 and Learning Objective 2.
2. Prepare an income statement based on the variable costing concept.
Sales $1,872,000 Manufacturing costs: Direct materials $943,500 Direct labor 277,500 Variable manufacturing cost 244,200 Fixed manufacturing cost 122,100 1,587,300 Selling and administrative expenses: Variable $145,600 Fixed 67,000 212,600Explanation / Answer
YoSan Inc. 1. Absorption Costing Income Statement For the Month Ended July 31 Sales 1872000 Cost of goods sold: Cost of goods manufactured (11100 units) Direct materials 943500 Direct labor 277,500 Variable manufacturing cost 244,200 Fixed manufacturing cost 122,100 Total cost of goods available for sale 1587300 Less: Inventory(July 31) 1587300/11100*700 units 100100 Total cost of goods sold (10400 units) 1487200 Gross profit 384800 Selling and administrative expenses 212600 Income from operations 172200 YoSan Inc. Variable Costing Income Statement 1872000 For the Month Ended July 31 Sales The variable cost of goods sold: Variable cost of goods manufactured Direct materials 943500 Direct labor 277,500 Variable manufacturing cost 244,200 1465200 Less: Inventory, July 31 (1465200/11100*700) 92400 Total variable cost of goods sold 1372800 Manufacturing margin 499200 Variable selling and administrative expenses 145600 Contribution margin 353600 Fixed costs: Fixed manufacturing costs 122100 Fixed selling and administrative expenses 67000 Total fixed costs 189100 Income from operations 164500 Reconciliation between both Income From Operations As per Variable costing 164500 Add: Fixed costs deferred in ending inventory(122100/11100*700) 7700 Income as per absorption costing 172200
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.