Income Statements under Absorption and Variable Costing The following informatio
ID: 2521229 • Letter: I
Question
Income Statements under Absorption and Variable Costing The following information pertains to Synergy Inc. for last year: Beginning inventory in units Units produced Units sold Costs per unit: 5,500 20,000 23,700 Direct materials Direct labour Variable overhead Fixed overhead Variable selling expenses $9.00 $4.00 $2.25 $4.15 $3.00 $24,300 Fixed selling and administrative expenses xed overhead totals $83,000 per year Assume that the selling price is $27 per unit. Required Hide 1. Prepare an income statement using absorption costing Synergy Inc. Absorption-costing income statement For Last Year Sales Less: Cost of goods sold Gross margin Less: Variable selling expense Selling and administrative exp Operating incomeExplanation / Answer
a) Absorption costing income statement :
Variable costing income statement :
Sales 639900 Less: Cost of goods sold 459780 Gross margin 180120 Less: Variable selling expense 71100 Fixed selling and administrative expense 24300 95400 Operating income 84720