Exercise 6-4 Variable costing income statement LO P2 Kenzi Kayaking, a manufactu
ID: 2556698 • Letter: E
Question
Exercise 6-4 Variable costing income statement LO P2 Kenzi Kayaking, a manufacturer of kayaks, beg?n operations this year. During this first year, the company produced 1,050 kayaks and sold 800. at a price of $1,050 each. At this first year-end, the company reported the following income statement information using absorption costing Sales (800 $1,e58) Cost of goods sold (380 $4e0) Gross marein selling and administrative expenses Net income S 848,88e 320,000 528,000 240,800 $ 288,880 Additionel Information a. Product cost per kayak totals $400, which consists of $300 in variable production cost and $100 in ived production cost-the lat amount is based on $105,000 of fixed production costs allocated to the 1,050 kayaks produced b. The $240.000 in selling and adminlstrative expense consists of $95000 that is variable and $145.000 that is fiwed Required 1. Prepare an income statement for the current yeer under variable costing. KENZI KAYAKING Yariable Costing Income StatementExplanation / Answer
income statement(Variable costing) Sales 840,000 Variable expense Variable production costs 240000 variable selling and administrative cost 95,000 total variable expense 335000 contribution margin 505,000 fixed expenses fixed overhead 105,000 fixed selling & administrative cost 145,000 total fixed expenses 250,000 net income 255,000