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Oak Mart, a producer of solid oak tables, reports the following data from its second year of business. $ 310 per unit 110,000 units 114,000 units 4,000 units $ 560,000 300,000 $ 860,000 Sales price per unit Units produced this year Units sold this year Units in beginning-year inventory Beginning inventory costs Variable (4,000 units x $140) Fixed (4,000 units x $75) Total Manufacturing costs this year Direct materials Direct labor Overhead costs this year Variable overhead Fixed overhead Selling and administrative costs this year Variable Fixed $ $ 48 per unit 66 per unit $3,400,000 $7,200,000 $1,400,000 4,000,000 2. Prepare the current-year income statement for the company using absorption costing. OAK MART COMPANY Absorption Costing Income Statement Beginning inventory Oak Mart, a producer of solid oak tables, reports the following data from its second year of business. $ Sales price per unit Units produced this year Units sold this year Units in beginning-year inventory Beginning inventory costs Variable (4,000 units x $140) Fixed (4,000 units * $75) 310 per unit 110,000 units 114,000 units 4,000 units $ 560,000 300,000 $ 860,000 Total $ 48 per unit 66 per unit Manufacturing costs this year Direct materials Direct labor Overhead costs this year Variable overhead Fixed overhead Selling and administrative costs this year Variable Fixed $3,400,000 $7,200,000 $1,400,000 4,000,000 1. Prepare the current-year income statement for the company using variable costing. OAK MART COMPANY Variable Costing Income Statement Sales Less: Variable costs Cool Sky reports the following costing data on its product for its first year of operations. During this first year, the company produced 42,000 units and sold 34,000 units at a price of $110 per unit. Manufacturing costs Direct materials per unit Direct labor per unit Variable overhead per unit Fixed overhead for the year Selling and administrative costs Variable selling and administrative cost per unit Fixed selling and administrative cost per year 42 $ 16 $ 5 $378,000 11 $115,000 1b. Assume the company uses absorption costing. Prepare its income statement for the year under absorption costing. COOL SKY Absorption Costing Income Statement Polarix is a retailer of ATVs (all-terrain vehicles) and accessories. An income statement for its Consumer ATV Department for the current year follows. ATVs sell for $3,400 each. Variable selling expenses are $230 per ATV. The remaining selling expenses are fixed. Administrative expenses are 50% variable and 50% fixed. The company does not manufacture its own ATVs; it purchases them from a supplier for $1,830 each. Sales POLARIX Income Statement-Consumer ATV Department For Year Ended December 31 $646,000 Cost of goods sold 347,700 Gross margin 298,300 Operating expenses Selling expenses $170,000 Administrative expenses 40,400 210,400 Net income $ 87,900 Required: 1. Prepare an income statement for the current year using the contribution margin format. (Do not round intermediate calculations. Round contribution margin per ATV value to the nearest whole number.) POLARIX Income Statement - Consumer ATV Department For Year Ended December 31 Sales $ 646,000 Less: Variable expenses Variable cost of goods sold
