$19$: Assignment

Exercise $19-8($Algo$)$ Variable costing income statement LO P$2$

Kenzi, a manufacturer of kayaks, began operations this year. During this year, the company produced $1,100$ kayaks and sold $850$ at a price of $$1,100$ each. At year$-$end, the company reported the following income statement information using absorption costing.

Sales $(850$$$1,100)$

Cost of goods sold $(850$$$450)$

Gross profit

Selling and administrative expenses

Income

Additional Information

a$.$ Product cost per kayak under absorption costing totals $$450,$ which consists of $$350$ in direct materials, direct labor, and variable overhead costs and $$100$ in fixed overhead cost. Fixed overhead of $$100$ per unit is based on $$110,000$ of foved overhead per year divided by $1,100$ kayaks produced.

b$.$ The $$240,000$ in selling and administrative expenses consists of $$95,000$ that is variable and $$145,000$ that is fixed.

Prepare an income statement for the current year under variable costing.

KENZI

Income Statement $($Variab le Costing$)$

Prey

$9$ of $10$

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