Question
In: Accounting
On July 31, 2016, the end of the first month of operations, Rhys Company prepared the...
On July 31, 2016, the end of the first month of operations, Rhys Company prepared the following income statement, based on the absorption costing concept:
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Rhys Company |
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Income Statement - Absorption Costing |
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For the Month Ended July 31, 2016 |
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1 |
Sales (97,000 units) |
$4,389,250.00 |
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2 |
Cost of goods sold: |
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3 |
Cost of goods manufactured |
$3,159,000.00 |
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4 |
Less ending inventory (20,000 units) |
540,000.00 |
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5 |
Cost of goods sold |
2,619,000.00 |
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6 |
Gross profit |
$1,770,250.00 |
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7 |
Selling and administrative expenses |
281,000.00 |
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8 |
Income from operations |
$1,489,250.00 A. Prepare a variable costing income statement, assuming that the fixed manufacturing costs were $140,400 and the variable selling and administrative expenses were $116,400. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. “Less” or “Plus” and colons will automatically appear if it is required. In your computations, round unit costs to two decimal places and round final answers to the nearest dollar.
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B. Reconcile the absorption costing income from operations of $1,489,250 with the variable costing income from operations previously determined.
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Rhys Company |
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Income from Operations - Absorption vs. Variable Costing |
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For the Month Ended July 31, 2016 |
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1 |
Absorption costing income from operations |
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2 |
Variable costing income from operations |
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3 |
Difference |
Solutions
ekkarill92 answered 2 years agoRelated Solutions
On July 31, the end of the first month of operations, Rhys Company prepared the following...
On July 31, the end of the first month of operations, Rhys
Company prepared the following income statement, based on the
absorption costing concept: Sales (20,000 units) $1,200,000 Cost of
goods sold: Cost of goods manufactured $930,000 Less ending
inventory (4,000 units) 155,000 Cost of goods sold 775,000 Gross
profit $425,000 Selling and administrative expenses 112,000 Income
from operations $313,000
a. Prepare a variable costing income statement, assuming that
the fixed manufacturing costs were $72,000 and the variable selling
and...
Variable Costing Income Statement On July 31, 2016, the end of the first month of operations,...
Variable Costing Income Statement
On July 31, 2016, the end of the first month of operations,
Holton Company prepared the following income statement, based on
the absorption costing concept:
Sales (18,000 units)
$972,000
Cost of goods sold:
Cost of goods manufactured
$748,000
Less ending inventory (4,000 units)
136,000
Cost of goods sold
612,000
Gross profit
$360,000
Selling and administrative expenses
68,000
Income from operations
$292,000
a. Prepare a variable costing income statement,
assuming that the fixed manufacturing costs were $44,000...
On October 31, the end of the first month of operations, Maryville Equipment Company prepared the...
On October 31, the end of the first month of operations,
Maryville Equipment Company prepared the following income
statement, based on the variable costing concept:
Maryville Equipment Company
Variable Costing Income Statement
For the Month Ended October 31
Sales (14,100 units)
$648,600
Variable cost of goods sold:
Variable cost of goods manufactured
$286,200
Inventory, October 31 (1,800 units)
(32,400)
Total variable cost of goods sold
(253,800)
Manufacturing margin
$394,800
Variable selling and administrative expenses
(169,200)
Contribution margin
$225,600
Fixed costs:...
On October 31, the end of the first month of operations, Morristown & Co. prepared the...
On October 31, the end of the first month of operations,
Morristown & Co. prepared the following income statement based
on absorption costing:
Morristown & Co.
Absorption Costing Income
Statement
For Month Ended October 31,
20--
Sales (2,600 units)
$117,000
Cost of goods sold:
Cost of goods manufactured
$85,500
Less ending inventory (400 units)
11,400
Cost of goods sold
74,100
Gross profit
$42,900
Selling and administrative expenses
21,500
Income from operations
$21,400
If the fixed manufacturing costs were $42,900 and...
Variable Costing Income Statement On July 31, the end of the first month of operations, Rhys...
Variable Costing Income Statement
On July 31, the end of the first month of operations, Rhys
Company prepared the following income statement, based on the
absorption costing concept:
Sales (20,000 units)
$1,520,000
Cost of goods sold:
Cost of goods manufactured
$1,152,000
Less ending inventory (4,000 units)
192,000
Cost of goods sold
960,000
Gross profit
$560,000
Selling and administrative expenses
112,000
Income from operations
$448,000
a. Prepare a variable costing income statement,
assuming that the fixed manufacturing costs were $72,000 and...
On April 30, the end of the first month of operations, Joplin Company prepared the following...
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 (4,000 units)
$64,000
Cost of goods sold:
Cost of goods manufactured (4,700 units)
$51,700
Inventory, April 30 (700 units)
(7,700)
Total cost of goods sold
(44,000)
Gross profit
$20,000
Selling and administrative expenses
(11,390)
Operating income
$8,610
If the fixed manufacturing costs were...
On November 30, the end of the first month of operations, Weatherford Company prepared the following...
On November 30, the end of the first month of operations,
Weatherford Company prepared the following income statement, based
on the absorption costing concept: Weatherford Company Absorption
Costing Income Statement For the Month Ended November 30 1 Sales
(22,000 units) $2,200,000.00 2 Cost of goods sold: 3 Cost of goods
manufactured (25,200 units) $2,016,000.00 4 Inventory, November 30
(3,200 units) (256,000.00) 5 Total cost of goods sold 1,760,000.00
6 Gross profit $440,000.00 7 Selling and administrative expenses
160,000.00 8 Income...
On November 30, the end of the first month of operations, Weatherford Company prepared the following...
On November 30, the end of the first month of operations,
Weatherford Company prepared the following income statement, based
on the The reporting of the costs of manufactured products,
normally direct materials, direct labor, and factory overhead, as
product costs.absorption costing concept:
Weatherford Company
Absorption Costing Income Statement
For the Month Ended November 30
Sales (5,900 units)
$123,900
Cost of goods sold:
Cost of goods manufactured (7,000 units)
$105,000
Inventory, November 30 (1,000 units)
(15,000)
Total cost of goods sold...
During the first month of operations ended March 31, 2016, Hip and Conscious Clothing Company produced...
During the first month of operations ended March 31, 2016, Hip
and Conscious Clothing Company produced 56,250 designer cowboy
hats, of which 52,950 were sold. Operating data for the month are
summarized as follows:
1
Sales
$794,250.00
2
Manufacturing costs:
3
Direct materials
$416,250.00
4
Direct labor
135,000.00
5
Variable manufacturing cost
61,875.00
6
Fixed manufacturing cost
56,250.00
669,375.00
7
Selling and administrative expenses:
8
Variable
$31,770.00
9
Fixed
26,475.00
58,245.00
During April, Hip and Conscious Clothing produced 49,650
designer...
Absorption Costing Income Statement On June 30, 2016, the end of the first month of operations,...
Absorption Costing Income Statement
On June 30, 2016, the end of the first month of operations,
Smithey Manufacturing Co. prepared the following income statement,
based on the variable costing concept:
Sales (90,000 units)
$990,000
Variable cost of goods sold:
Variable cost of goods manufactured (110,000 units x $8 per
unit)
$880,000
Less ending inventory (20,000 units x $8 per unit)
160,000
Variable cost of goods sold
720,000
Manufacturing margin
$270,000
Variable selling and administrative expenses
9,000
Contribution margin
$261,000
Fixed...
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