O\'Neill\'s Products manufactures a single product. Cost, sales, and production
ID: 2544487 • Letter: O
Question
O'Neill's Products manufactures a single product. Cost, sales, and production information for the company and its single product is as follows (Click the icon to view the data.) Read the requirements Requirement 1. Prepare an income statement for the upcoming year using variable costing O'Neill's Products Contribution Margin Income Statement (Variable Costing) For the Year Ended December 31 6 More Info Sales revenue Less: Variable expenses Selling price per unit is $54 Variable manufacturing costs per unit manufactured (includes direct materials [DM, direct labor [DL], and variable MOH) $27 Variable operating expenses per unit sold $4 Fixed manufacturing overhead (MOH) in total for the year $120,000 Fixed operating expenses in total for the year $92,000 Units manufactured and sold for the year 12,000 units Variable cost of goods sold Variable operating expenses Contribution margin Less: Fixed expenses Fixed manufacturing overhead Fixed operating expenses Print Done Operating incomeExplanation / Answer
Income statement (variable costing)
sales revenue
12000*54
648000
less variable expense
variable cost of goods sold
12000*27
324000
variable operating expense
12000*4
48000
contribution margin
276000
less fixed expenses
fixed manufacturing overhead
120000
fixed operating expenses
92000
operating income
64000
Income statement (absorption costing)
sales revenue
12000*54
648000
less cost of goods sold
12000*41
492000
gross profit
156000
less fixed operating expenses
92000
operating profit
64000
cost of goods sold
27+4+(120000/12000) = 41
41
Income statement (variable costing)
sales revenue
12000*54
648000
less variable expense
variable cost of goods sold
12000*27
324000
variable operating expense
12000*4
48000
contribution margin
276000
less fixed expenses
fixed manufacturing overhead
120000
fixed operating expenses
92000
operating income
64000
Income statement (absorption costing)
sales revenue
12000*54
648000
less cost of goods sold
12000*41
492000
gross profit
156000
less fixed operating expenses
92000
operating profit
64000
cost of goods sold
27+4+(120000/12000) = 41
41