The following is the absorption costing income statement of Alpha Manufacturing Company for the year ended...
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The following is the absorption costing income statement of Alpha Manufacturing Company for the year ended December 31, 2016: ALPHA MANUFACTURING COMPANY Income Statement (Absorption Costing) For the Year Ended December 31, 2016 Sales (40,000 units - $67.50) Less cost of goods sold: Opening inventory Add cost of goods manufactured (50,000 units $42) Cost of goods available for sale Less closing inventory (10,000 units - $42) Gross profit Less selling and administrative expenses Net operating income $ $2,700,000 2,100,000 2,100,000 420,000 1.680,000 $1,020,000 840,000 $ 180,000 Fixed selling and administrative expenses are $600,000. Variable selling and administrative expenses are $6 per unit sold. The unit product cost under absorption costing is computed as follows: Required: Direct material Direct labor Variable manufacturing overhead Fixed overhead manufacturing ($500,000 50,000 units) Unit product cost 20 8 4 10 $ 42 1. Prepare an income statement of Alpha Manufacturing Company using variable costing system. The following is the absorption costing income statement of Alpha Manufacturing Company for the year ended December 31, 2016: ALPHA MANUFACTURING COMPANY Income Statement (Absorption Costing) For the Year Ended December 31, 2016 Sales (40,000 units - $67.50) Less cost of goods sold: Opening inventory Add cost of goods manufactured (50,000 units $42) Cost of goods available for sale Less closing inventory (10,000 units - $42) Gross profit Less selling and administrative expenses Net operating income $ $2,700,000 2,100,000 2,100,000 420,000 1.680,000 $1,020,000 840,000 $ 180,000 Fixed selling and administrative expenses are $600,000. Variable selling and administrative expenses are $6 per unit sold. The unit product cost under absorption costing is computed as follows: Required: Direct material Direct labor Variable manufacturing overhead Fixed overhead manufacturing ($500,000 50,000 units) Unit product cost 20 8 4 10 $ 42 1. Prepare an income statement of Alpha Manufacturing Company using variable costing system.
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Related Book For
College Accounting Chapters 1-30
ISBN: 978-0077862398
14th edition
Authors: John Price, M. David Haddock, Michael Farina
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