Show Me How Joplin Industries Inc. manutactures and sels high-quality sporting g

Question

Show Me How Joplin Industries Inc. manutactures and sels high-quality sporting goods equipment under ts highly necogniarable J-Sports logo. The compary began oetns on ay 1 and apenated units at $100 per unit. The June mandscturing costs and selling and administraive expenses wene a Number of Units Unit Cost Total Cost Manufacturing costs in June 1 beginning inventory 11,000 52 $572,000 11,000 Manufacturing cons in Jne 52 $3869800 748,000 2 9437 800 Seling and aoministrative expenses in 18 $1,544 430 MacBook Air 888 a 4

Explanation / Answer

1. Absorption Costing Income Statement Particular Amount Amount Sales (85800 units × $100 per unit) $8,580,000 Less : cost of goods sold: Beginning Inventory $660,000 Cost of Goods Manufactured $4,637,600 $5,297,600 Gross Profit $3,282,400 Less: selling and administrative expenses Variable Cost $1,544,400 Fixed Cost $171,600 $1,716,000 Net operating income $1,738,000 2. Variable Costing Income Statement Particular Amount Amount Sales (85800 units × $100 per unit) $8,580,000 Less: variable manufacturing costs (85800*$52) $4,461,600 Variable selling and administrative expenses (85800*$18) $1,544,400 $6,006,000 Contribution margin $2,574,000 Less: Fixed Expense Fixed manufacturing overhead $748,000 Fixed selling and administrative expenses $171,600 $919,600 Net operating loss $1,654,400 3. . Under Aborption Costing method, the fixed manufactruing cost included in the cost of goods sold is matched with revenue. Under Variable costing Method all of the fixed manufacturing cost id deducted in the period in which it's incurred, regardless of the inventory change. When inventory decrease, the absortion costing income statement will have a lower income from operation.

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