Cool Sky reports the following costing data on its product for its first year of
ID: 2410441 • Letter: C
Question
Cool Sky reports the following costing data on its product for its first year of operations. During this first year, the company produced 40,000 units and sold 32,000 units at a price of $150 per unit Manufacturing costs $ 66 Direct materials per unit Direct labor per unit Variable overhead per unit Fixed overhead for the year 25 $ 520,000 12 Selling and administrative costs Variable selling and administrative cost per unit Fixed selling and administrative cost per year $ 120,000 1b. Assume the company uses absorption costing. Prepare its income statement for the year under absorption costing COOL SKY Absorption Costing Income Statement Net income (loss)Explanation / Answer
Answer
cool sky company absorption costing income statement
particular amount amount sales 4800000 less; cost of goods sold direct material 2112000 direct labor 800000 variable overhead cost 288000 fixed overhead costs 416000 cost of goods sold 3616000 gross profit 1184000 less selling and administrative expenses variable selling and administrative expenses 384000 fixed selling and administrative expenses 120000 total selling and administrative expenses 504000 net operating income 680000