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Required information (The following information applies to the questions displayed below.] Oak Mart, a producer of solid oak tables, reports the following data from its second year of business. 330 per unit 115,000 units 118,000 units 3,000 units $ 390,000 240,000 $ 630,000 Sales price per unit Units produced this year Units sold this year Units in beginning-year inventory Beginning inventory costs Variable (3,000 units x $130) Fixed (3,000 units x $80) 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 44 per unit 66 per unit $3,200,000 $7,200,000 $1,350,000 4,000,000 1. Prepare the current-year income statement for the company using variable costing. OAK MART COMPANY Variable Costing Income Statement Sales 38,940,000 Less: Variable costs Beginning inventory: Variable costs $ 390,000 Manufacturing costs this year Direct materials Direct labor 5,192,000 7,788,000 3,200,000 16,570,000 Variable overhead costs Total variable costs available Less: Ending finished goods inventory Variable cost of goods sold Variable selling and administrative expenses | 1,350,000 Total variable costs 1,350,000 Contribution margin Less: Fixed expenses Fixed selling and administrative costs 14 000 0001 T.UUUUUU Fixed overhead costs 7,200,000 Total fixed expenses 11,200,000 Net income (loss) Required information [The following information applies to the questions displayed below.) Oak Mart, a producer of solid oak tables, reports the following data from its second year of business. 330 per unit 115,000 units 118,000 units 3,000 units $ 390,000 240,000 $ 630,000 Sales price per unit Units produced this year Units sold this year Units in beginning-year inventory Beginning inventory costs Variable (3,000 units x $130) Fixed (3,000 units x $80) 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 44 per unit 66 per unit u $3,200,000 $7,200,000 $1,350,000 4,000,000 2. Prepare the current year income statement for the company using absorption costing. Absorption Costing income Statement Sales 38,940,000 Beginning inventory Manufacturing costs this year Variable overhead costs Direct labor Direct materials 66 44 Less: Ending inventory Fixed overhead costs 4,000,000 4,000, 110 Cost of goods sold Gross margin Selling general and administrative expenses Fixed selling and administrative costs Variable selling and administrative expenses Net income (loss) Net income under variable costing is higher than net income under absorption costing by: Fixed costs added to(subtracted from) inventory
