Question

On January 1 of the current year, Townsend Co. commenced operations. It operated its plant at 100% of capacity during January. The following data summarized the results for January:

	Units
Production	50,000
Sales ($18 per unit)	42,000
Inventory, January 31	8,000
Manufacturing costs:
Variable	$575,000
Fixed	80,000
Total	$655,000
Selling and administrative expenses:
Variable	$35,000
Fixed	10,500
Total	$ 45,500

Labels

Fixed costs

For Month Ended January 31, 20--

Amount Descriptions

Contribution margin

Cost of goods manufactured

Cost of goods sold

Fixed manufacturing costs

Fixed selling and administrative expenses

Gross profit

Income from operations

Inventory, January 31, 20--

Manufacturing margin

Sales

Selling and administrative expenses

Variable cost of goods manufactured

Variable cost of goods sold

Variable selling and administrative expenses

Absorption Costing Income Statement

a.Prepare an income statement using absorption costing. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. “Less” or “Plus” will automatically appear if it is required. You will not need to enter colons (:) on the financial statements. If a net loss is incurred, enter that amount as a negative number using a minus sign.

Label_______________

Acount Description ________ Amount ________

Cost of goods sold:

Acount Description ________ Amount________

Acount Description ________     Amount________

Acount Description ________     Amount________

Acount Description ________     Amount________

Acount Description ________    Amount________

Acount Description ________     Amount________

Variable Costing Income Statement

Prepare an income statement using variable costing. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. “Less” or “Plus” will automatically appear if it is required. You will not need to enter colons (:) on the financial statements. If a net loss is incurred, enter that amount as a negative number using a minus sign.

Label_______________

Acount Description ________ Amount ________

Variable cost of goods sold:

Acount Description ________ Amount________

Acount Description ________     Amount________

Acount Description ________     Amount________

Acount Description ________     Amount________

Acount Description ________    Amount________

Acount Description ________     Amount________

Label _____________   

Acount Description ________     Amount________

Acount Description ________    Amount________

Acount Description ________     Amount________

Answer 1