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Create a traditional format income statement using Absorption Costing using the information below and from problem #1: Cost information Variable costs per unit: Direct materials
Create a traditional format income statement using Absorption Costing using the information below and from problem #1:
Variable costs per unit: | |
---|---|
Direct materials | $9 |
Direct labor | $10 |
Variable MOH | $5 |
Variable Selling & Admin. | $3 |
Fixed costs in total: | |
Fixed MOH | $300,000 |
Fixed Selling & Admin. | $400,000 |
Units produced: 25,000 Units sold: 20,000
Sales Price Per Unit: $70
Cost of Goods Sold calculation:
Beginning inventory | $0 |
+Cost of Goods Manuf. | [ Select ] ["720,000", "900,000", "480,000", "600,000"] |
=Cost of Goods Avail for Sale | [ Select ] ["800,000", "600,000", "720,000", "900,000"] |
-Ending inventory (5,000 units*) | [ Select ] ["360,000", "180,000", "480,000", "120,000"] |
=Cost of Goods Sold | [ Select ] ["250,000", "180,000", "900,000", "720,000"] |
*25,000 units produced - 20,000 units sold = 5,000 units in ending inventory |
Absorption Costing Income Statement:
Sales | $ [ Select ] ["600,000", "800,000", "900,000", "1,400,000"] | |
Less: COGS (see above) | [ Select ] ["600,000", "360,000", "720,000", "900,000"] | |
Gross Margin | [ Select ] ["680,000", "540,000", "720,000", "480,000"] | |
Less: Selling & Admin | ||
Variable Selling & Admin | $60,000 | |
Fixed Selling & Admin | [ Select ] ["400,000", "300,000", "200,000", "800,000"] | |
Total Selling & Admin | [ Select ] ["340,000", "460,000", "400,000", "600,000"] | |
Net Operating Income | $ [ Select ] ["320,000", "220,000", "280,000", "460,000"] |
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