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
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For Month Ended December 31, 2017
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Sales
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