Parry Manufacturing Company makes a product that sells for $74.30 per unit. Manu
ID: 2456150 • Letter: P
Question
Parry Manufacturing Company makes a product that sells for $74.30 per unit. Manufacturing costs for the product amount to $26.70 per unit variable, and $87,360 fixed. During the current accounting period, Parry made 4,200 units of the product and sold 3,600 units. Selling and administrative expenses were zero.
Prepare an absorption costing income statement.
Prepare a variable costing income statement.
Parry Manufacturing Company makes a product that sells for $74.30 per unit. Manufacturing costs for the product amount to $26.70 per unit variable, and $87,360 fixed. During the current accounting period, Parry made 4,200 units of the product and sold 3,600 units. Selling and administrative expenses were zero.
Explanation / Answer
a)
b)
PARRY MANUFACTURING COMPANY Absorption Costing Income Statement For the Year ended December 31 Sales ( 3600 Unit @ $ 74.30) 267,480 Cost of Good Sold (87360/4200*3600 + 26.70*3600 ) 171,000 Gross Margin 96,480 Selling Expenses - Administartion Expenses - Net operating Income 96,480