Wingfoot Co. began operations on July 1, 2011. By the end of its first fiscal year, ended

Question:

Wingfoot Co. began operations on July 1, 2011. By the end of its first fiscal year, ended June 30, 2012, Wingfoot had sold 10,000 wingers. Selected data on operations for the year ended June 30, 2012, follow. (Any balance sheet figures are as at June 30, 2012.)

Selling price ........................................................ $100

Wingers produced ............................................... 18,000

Ending work in process ............................................... 0

Total manufacturing overhead ................................ $15,000

Wage rate .................................................... $8 per hour

Machine hours used ............................................... 9,000

Wages payable ................................................... $20,000

Direct materials costs ................................ $10 per kilogram

Selling and administrative expenses .......................... $40,000

Additional information:

1. Each winger requires 2 kg of direct materials, 0.5 machine hours, and one direct labour hour.

2. Except for machinery depreciation of $5,000 and a $1,000 miscellaneous fixed cost, all manufacturing overhead is variable.

3. Except for $4,000 in advertising expenses, all selling and administrative expenses are variable.

4. The tax rate is 40%.

Instructions

Assume that the company uses variable costing and prepare a contribution-method income statement in good form for the year ended June 30, 2012?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...