Problem 1: (20 points) Anatase, Inc. reports the following information nits prod

Question

Problem 1: (20 points) Anatase, Inc. reports the following information nits produced 2,500 units 2,000 units nits sold ales price $200 per unit $40 per unit per unit 20 per unit $90,000 per year irect materials Direct labor ariable manufacturing overhead overhead52 ixed manufacturing overhead Variable selling and administrative costs $15 per unit Fixed selling and administrative costs $75,000 per year Assume no beginning inventories. Requirements: a) Prepare an Income Statement using absorption costing in proper format b) Prepare an Income Statement using variable costing in proper format

Explanation / Answer

Absorption costing income statement :

Variable costing income statement :

Sales (2000*200) 400000 Less: Cost of goods sold (40+25+20+36)*2000 -242000 Gross profit 158000 Less: Selling and administrative expense (2000*15+75000) -105000 Net operating income 53000

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