Sims Company, a manufacturer of in-home decorative fountains, began operations o
ID: 2484492 • Letter: S
Question
Sims Company, a manufacturer of in-home decorative fountains, began operations on September 1 of the current year. Its cost and sales information for this vear follows Production costs Direct materials Direct labor Overhead costs for the year 40 per unit 60 per unit $4,200,000 $ 6,300,000 Variable overhead Fixed overhead Nonproduction costs for the year Variable selling and administrative Fixed selling and administrative $ 800,000 $4,500,000 Production and sales for the vear Units produced Units sold Sales price per unit 105.000 units 75,000 units 360 per unit 1. Prepare an income statement for the company using variable costing SIMS COMPANY Variable Costing Income Statement Sales $ 27,000,000 Less: Cost of goods sold Direct materials Direct labor Variable overhead Fixed overhead 3,000,000 4,500,000 3,000,000 4,500,000 15,000,000 Less: Variable costs Net income (loss)Explanation / Answer
Answer 1
Less :variable cost of goods sold:
Answer 2
Answer3
production equal sales and there is no beggining and finished goods inventory.
Sales 27000000Less :variable cost of goods sold:
Beginning inventory 0 Variable cost of goods manufactured (105000 * 100) 10500000 Variable cost of goods available for sale 10500000 Less :Closing inventory(30000 * 100) 3000000 7500000 Contribution margin 19500000 Variable Sellimg and admin. expenses 800000 18700000 LESS: Fixed Fixed Overhead 6300000 Fixed Sellimg and admin. expenses 4500000 10800000 NET INCOME 7900000