Aces Inc., a manufacturer of tennis rackets, began operations this year. The com

Question

Aces Inc., a manufacturer of tennis rackets, began operations this year. The company produced 7,000 rackets and sold 5,900. Each racket was sold at a price of $100. Fixed overhead costs are $98,000 and fixed selling and administrative costs are $66,200. The company also reports the following per unit costs for the year:

Variable production costs Variable selling and administrative expenses 3.00 Required: Prepare an income statement under absorption costing ACES INC. Absorption Costing Income Statement Selling general and administrative expenses Net income (loss)

Explanation / Answer

absorption cost statement:

Sale (5900*100) 590000

Less:

Variable selling & admin cost(29*7000) 203000

Fixed cost (98000+66200) 164200

Net income 222800   

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