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Variable Costing Income Statement On April 30, the end of the first month of operations, Joplin...

Variable Costing Income Statement

On April 30, the end of the first month of operations, Joplin Company prepared the following income statement, based on the absorption costing concept:

Joplin Company
Absorption Costing Income Statement
For the Month Ended April 30
Sales (3,400 units) $129,200
Cost of goods sold:
Cost of goods manufactured (4,000 units) $108,000
Inventory, April 30 (600 units) (16,200)
Total cost of goods sold (91,800)
Gross profit $37,400
Selling and administrative expenses (22,810)
Operating income $14,590

If the fixed manufacturing costs were $28,080 and the fixed selling and administrative expenses were $11,170, prepare an income statement according to the variable costing concept. Round all final answers to whole dollars.

Joplin Company
Variable Costing Income Statement
For the Month Ended April 30
$
Variable cost of goods sold:
$
$
$
Fixed costs:
$
$

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Expert Solution

                                                  Joplin Company

                                      Variable Costing Income Statement

                                              For the Month Ended April 30

$ $
Sales        129,200
Variable Cost of goods Sold:
Variable Cost of goods manufactured (W. Note 1)        79,920
Inventory, April 30 (W. Note 2)     (11,988)
Total variable cost of goods Sold        (67,932)
Manufacturing Margin       61,268
Variable selling and administrative expenses (W. Note 3)    (11,640)
Contribution Margin         49,628
Fixed manufacturing costs       28,080
Fixed selling and administrative expenses       11,170       (39,250)
Operating Income $10,378

W. Note: 1

Variable cost of goods manufactured = Total manufacturing cost - Fixed manufacturing costs

                                                     = $108,000 - $28,080

                                                     = $79,920

W. Note: 2

Variable cost per unit = $79,920 / 4,000 units

                               = $19.98

So Inventory, April 30 = 600 units * $19.98

                                 = $11,988

W. Note: 3

Variable selling and administrative expenses = Total selling and administrative expenses - Fixed selling and administrative expenses

                                                               = $22,810 - $11,170

                                                               = $11,640

ekkarill92 answered 2 years ago
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