Problem 1: (20 points) Anatase, Inc.reports the following information: Units pro
ID: 2518330 • Letter: P
Question
Problem 1: (20 points) Anatase, Inc.reports the following information: Units produced 2,500 units_ Units sold Sales price Direct materials 2,000 units $200 per unit $40 per unit $25 per unit $20 per unit 90,000 per year irect labor ariable manufacturing overhead ixed manufacturing overhead ariable selling and administrative costs Fixed selling and administrative costs $75,000 per year $15 per unit Assume no beginning inventories. Requirements: a) Prepare an Income Statement using absorption costing in proper format. b) Prepare arExplanation / Answer
unit product cost under Absorptiong costing Direct materials 40 direct labor 25 variable manufacturing overhead 20 fixed manufacturing overhead (90,000/2500) 36 unit product cost 121 1) Absorption costing sales (2000*200) 400000 less :Cost of goods sold (2000*121) 242000 Gross profit 158000 Selling expense variable selling exp (2000*15) 30000 fixed selling expense 75,000 105,000 net income 53,000 2) unit product cost under variable costing Direct materials 40 direct labor 25 variable manufacturing overhead 20 unit product cost under variable costing 85 contribution income statement sales 400000 less:Variable expense variable cost of goods sold (2000*85) 170000 Variable selling expense 30,000 200,000 contribution margin 200,000 fixed expenses fixed manufacturing overhead 90,000 fixed selling & adm expense 75,000 165,000 Net operating income 35,000