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Absorption and Variable Costing Income Statements During the first month of operations ended July 31, YoSan...

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 ______________

Solutions

Expert Solution

ANSWER (1)

YoSan Inc.

Absorption Costing Income Statement
For the Month Ended July 31

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.

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


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