Holden Corp. has the following income statement under standard absorption costing: Sales .. $1,000,000 Cost of goods
Question:
Holden Corp. has the following income statement under standard absorption costing:
Sales ……………………………….. $1,000,000
Cost of goods sold:
Beginning inventory ……………………… $ 0
Production …………………………. $ 975,000
Ending inventory ……………….…..$ 225,000
Cost of goods sold: ……………….. $ 750,000
Less adjustment for variances ………. $ 95,000
Adjusted cost of goods sold ……….. $ 655,000
Gross profit …………………………. $ 345,000
Selling and administrative expenses
Variable selling and administrative ….. $ 30,000
Fixed selling and administrative ……. $ 170,000
Net income …………………………. $ 145,000
During the period Holden produced 130,000 units and sold 100,000 units. There was no beginning or ending WIP inventory. Budgeted fixed factory overhead was $150,000, actual fixed factory overhead was $90,000, and denominator level was 100,000 units. Holden does not prorate variances.
Present a variable costing income statement. Be sure to list the amount of any variance in an adjustment for variances.
Ending InventoryThe ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula Ending Inventory Formula =...
Step by Step Answer:
Variable manufacturing CGS standard absorption CGS the fixed factory overhead rate The standard abso...View the full answer
Introduction to Management Accounting
ISBN: 978-0133058789
16th edition
Authors: Charles Horngren, Gary Sundem, Jeff Schatzberg, Dave Burgsta
