The company produces the same number of units every month, although the sales in

Question

The company produces the same number of units every month, although the sales in units vary from month to month. The company's variable costs per unit and total fixed costs have been constant from month to month.

Required:

a. Prepare a contribution format income statement for the month using variable costing.
b. Prepare an income statement for the month using absorption costing.

Selling price... $92 Units in beginning inventory Units produced. 300 5,900 6,000 200 13), Variable costs per unit: $39 $19 $2 $11 Direct materials. Direct labor. Variable manufacturing overhead.. Fixed costs: $88,500 $36,000 Fixed selling and administrative

Explanation / Answer

Answer:-a)-

b)-

Where:-

Manufaturing expenses per unit= Variable expenses+Fixed expenses

                                                  =$60 per unit+($88500/5900units)

                                                  =$60 per unit+$15 per unit = $75 per unit

Aldene Company Income statement using variable costing Particulars Amount $ Sales (a) 6000 units*$92 per unit 552000 Less:- Variable cost of goods sold (b) Opening inventory 300 units*$60 per unit 18000 Add:- Variable cost of goods manufatured 5900 units*60 per unit 354000 Variable cost of goods available for sale 372000 Less:- Closing inventory 200 units*$60 per unit 12000 360000 Gross contribution margin C= a-b 192000 Less:-Variable selling & administaion cost 6000 units*$11 per unit 66000 Contribution margin 126000 Less:- Period Expenses Fixed Manufaturing overhead 88500 Fixed Selling & Administrative overhead 36000 Net Opreating Income 1500

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---