A.

Prepare a variable costing income statement, assuming that the fixed manufacturing costs were $132,000 and the variable selling and administrative expenses were $115,200. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Less or Plus and colons will automatically appear if it is required. In your computations, round unit costs to two decimal places and round final answers to the nearest dollar.

B.

Reconcile the absorption costing income from operations of $1,656,000 with the variable costing income from operations determined in (A).

Rhys Company Income Statement - Absorption Costing For the Month Ended July 31, 2016 1 Sales (96,000 units) 2 Cost of goods sold: 3 Cost of goods manufactured 4 Less ending inventory (24,000 units) 5 Cost of goods sold 6 Gross profit 7 Selling and administrative expenses 8 Income from operations $3,120,000.00 624,000.00 $4,440,000.00 2,496,000.00 $1,944,000.00 288,000.00 $1,656,000.00 Rhys Company Income Statement - Variable Costing For the Month Ended July 31, 2016 1 Sales 2 Variable cost of goods sold: 3 Variable cost of goods manufactured 4 Less ending inventory 5 Variable cost of goods sold 6 Manufacturing margin 7 Variable selling and administrative expenses 8 Contribution margin 9 Fixed costs: 10 Fixed manufacturing costs 11 Fixed selling and administrative expenses 12 Income from operations Score: 56/96 $4,440,000.00 Question not attempted. 1 Absorption costing income from operations 2 Variable costing income from operations 3 Difference Rhys Company Income from Operations - Absorption vs. Variable Costing For the Month Ended July 31, 2016 Score: 0/12