Campbell Glass Company makes stained glass lamps. Each lamp that it sells for $315.10 per lamp...

Campbell Glass Company makes stained glass lamps. Each lamp that it sells for $315.10 per lamp requires $16.70 of direct materials and $70.30 of direct labor. Fixed overhead costs are expected to be $190,500 per year. Campbell Glass expects to sell 1,000 lamps during the coming year. Selling and administrative expenses were zero.

Required

Prepare income statements using absorption costing, assuming that Campbell Glass makes 1,000, 1,250, and 1,500 lamps during the year.
Prepare income statements using variable costing, assuming that Campbell Glass makes 1,000, 1,250, and 1,500 lamps during the year.

Prepare income statements using absorption costing, assuming that Campbell Glass makes 1,000, 1,250, and 1,500 lamps during the year. (Do not round intermediate calculations.)

CAMPBELL GLASS COMPANY
Income Statements – Absorption Costing
Units Produced	1,000	1,250	1,500


	0	0	0


	$0	$0	$0

Prepare income statements using variable costing, assuming that Campbell Glass makes 1,000, 1,250, and 1,500 lamps during the year. (Do not round intermediate calculations.)

CAMPBELL GLASS COMPANY
Income Statements – Variable Costing
Units Produced	1,000	1,250	1,500


	0	0	0


	$0	$0	$0

Solutions

Expert Solution



					Fixed Cost PU:	1000	1250	1500
CAMPBELL GLASS COMPANY					Total Fixed Cost	190500	190500	190500
Income Statement-Absorption Costing					Fixed Cost PU:	190.50	152.40	127.00
Units Produced	1000	1250	1500
Sales	315100	393875	472650	(Units*315.10)	Unit Cost-Abs Cost	1000	1250	1500
Less: Cost of Goods Sold	277500	299250	321000	(Unit Cost*Qty Sold)	Direct Material	16.70	16.70	16.70
Gross Profit	37600	94625	151650		Direct Labor	70.30	70.30	70.30
Less: S&A Expense	0	0	0		Fixed Cost PU	190.50	152.40	127.00
NOI	37600	94625	151650		Unit Cost-Abs Cost	277.50	239.40	214.00




CAMPBELL GLASS COMPANY
Income Statement-Variable Costing
Units Produced	1000	1250	1500
Sales	315100	393875	472650	(Units*315.10)	Unit Cost-Vari Cost	1000	1250	1500
Less: Cost of Goods Sold	87000	108750	130500	(Unit Cost*Qty Sold)	Direct Material	16.70	16.70	16.70
Gross Profit	228100	285125	342150		Direct Labor	70.30	70.30	70.30
Less: Period Expense-Fixed Cost	190500	190500	190500		Fixed Cost PU	0.00	0.00	0.00
NOI	37600	94625	151650		Unit Cost-Abs Cost	87.00	87.00	87.00

ekkarill92 answered 1 month ago

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