Question

In: Accounting

Baird Manufacturing Company makes a product that sells for $75 30 per unit Manufacturing costs for the product

Problem 11-23A (Algo) Absorption versus variable costing LO 11-4

Baird Manufacturing Company makes a product that sells for $75 30 per unit Manufacturing costs for the product amount to $26.00 per unit variable, and $74,520 feed. During the current accounting period, Baird made 3.600 units of the product and sold 3.200 units Selling and administrative expenses were zero."

Required

a. Prepare an absorption costing income statement.

b. Prepare a variable costing income statement. Complete this question by entering your answers in the tabs below.

Solutions

Expert Solution

Unit product cost - absorption costing

Variable manufacturing cost $26.00

Fixed manufacturing cost $20.70

Total $46.70

Baird Manufacturing Company

Absorption costing income statement

Particulars Amount

Sales (3200* $75.30) $240,960

Cost of goods sold $149,440

Contribution Margin $91,520

Selling & Administrative expenses $0

Net Operating Income $91,520

Solution b:

Baird Manufacturing Company

Variable costing income statement

Particulars Amount

Sales (3200* $75.30) $240,960

Less: variable manufacturing cost (3200*$26) $83,200

Contribution Margin $157,760

Less: Fixed manufacturing cost $74,520

Less: Fixed Selling and administrative cost $0

Net Operating Income $83,240

Absorption costing - Net Operating Income $91,520

Variable costing - Net Operating Income $83,240

S Mahalaxmi answered 2 years ago

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