In: Accounting
Absorption and Variable Costing Income Statements
During the first month of operations ended July 31, YoSan Inc. manufactured 9,700 flat panel televisions, of which 9,000 were sold. Operating data for the month are summarized as follows:
Sales | $1,305,000 | |
Manufacturing costs: | ||
Direct materials | $659,600 | |
Direct labor | 194,000 | |
Variable manufacturing cost | 164,900 | |
Fixed manufacturing cost | 87,300 | 1,105,800 |
Selling and administrative expenses: | ||
Variable | $108,000 | |
Fixed | 49,700 | 157,700 |
Required:
1. Prepare an income statement based on the absorption costing concept.
YoSan Inc. | ||
Absorption Costing Income Statement | ||
For the Month Ended July 31 |
Sales _______
Cost of goods sold:
Cost of goods manufactured ____________
Inventory, July 31 _____________
Total cost of goods sold ____________
Gross profit______________
Selling and administravice expenses __________
Income from operations _______________
2. Prepare an income statement based on the variable costing concept.
YoSan Inc. | ||
Variable Costing Income Statement | ||
For the Month Ended July 31 |
Sales ___________-
Variable cost of goods sold:
Variable cost of goods manufactured ___________
Inventory, July 31___________
Total variable cost of goods sold ____________
Manufacturing margin _____________
Variable selling and administrative expenses ________________
Contribution margin _____________
Fixed costs:
Fixed manufacturing costs _____________
Fixed selling and administrative expenses ____________
Total fixed costs _________________
Income from operations ______________
Sales 1305000 Cost of goods sold: Cost of goods manufactured 1105800 Inventory, July 31 (79800) Total cost of goods sold 1026000 Gross profit 279000 Selling and administrative expenses (157700) Income from operations 121300 ANSWER.(2) YoSan Inc. |
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Variable Costing Income Statement | |||||||||||
For the Month Ended July 31 |
Sales 1,305,000
Variable cost of goods sold:
Variable cost of goods manufactured 1,018,500
Inventory, July 31 (73500)
Total variable cost of goods sold 945,000
Manufacturing margin 360,000
Variable selling and administrative expenses (108000)
Contribution margin 252000
Fixed costs:
Fixed manufacturing costs 87300
Fixed selling and administrative expenses 49700
Total fixed costs (137000)
Income from operations 115000
Working Notes:
1. Variable Cost of Goods Manufactured=
Direct materials | $659,600 | |
Direct labor | 194,000 | |
Variable manufacturing cost | 164,900 |
Total Variable Cost of Goods manufactured 1018500