Exam $1$: Chapter $9$ Review Question

Smart Phone sold $800$ cell phones in $2019$ at $$300$ per phone. It has no beginning inventory $($BI$),$ the variable operating marketing cost per phone sold is $$25,$ and the ending inventory $($EI$)$ is $200$ phones. Its variable manufacturing cost per phone is $$75$ and its total $($full cost$)$ manufacturing cost per unit is $$175.$ Allocated fixed manufacturing overhead $($FOH$)$ is $$100,000.$

Smart $$ Phone has the following summary absorption costing income statement for $2019$:

$2019$ Absorption$-$Costing Based Operating Income Statement

Revenues

$$240,000$

Less: Cost of goods sold

Less: Overapplied $\frac{O}{H}$

$140,000$

Adjusted Cost of goods sold

$(5,000)$

Gross margin

Less: Operating costs

Operating income

$135,{000}_{?}$

$105,000$

$70,{000}_{?}$

Prepare Smart Phone's $2019$ detailed variable costing income statement

Reconcile the income differences