Map Company, which has only one product, has provided the following data concern
ID: 2391848 • Letter: M
Question
Map Company, which has only one product, has provided the following data concerning its most recent month of operations: Selling price $140 Units in beginning inventory 0 Units produced 7,400 Units sold 7,200 Units in ending inventory 200 Variable costs per unit: Direct materials $42 Direct labor $32 Variable manufacturing overhead $1 Variable selling and administrative $8 Fixed costs: Fixed manufacturing overhead $280,800 Fixed selling and administrative $98,000
Prepare an income statement for the month using the contribution format and the variable costing method.
Prepare an income statement for the month using the absorption costing method.
Explanation / Answer
Prepare an income statement for the month using the contribution format and the variable costing method.
Prepare an income statement for the month using the absorption costing method.
Sales (7200*140) 1008000 Less: Variable cost of goods sold Direct material 302400 Direct labour 230400 Variable manufacturing overhead 7200 Total variable cost of goods sold 540000 Manufacturing margin 468000 Variable selling and administrative expense 57600 Contribution margin 410400 Fixed cost Fixed manufacturing overhead 280800 Fixed selling and administrative expense 98000 Total fixed cost 378800 Net operating income 31600