Question
1 Sales $10,800,000.00 2 Manufacturing costs: 3 Direct materials $6,400,000.00 4 Direct labor 1,600,000.00 5 Variable manufacturing cost 1,280,000.00 6 Fixed manufacturing cost 320,000.00 9,600,000.00
1 | Sales |
| $10,800,000.00 |
2 | Manufacturing costs: |
|
|
3 | Direct materials | $6,400,000.00 |
|
4 | Direct labor | 1,600,000.00 |
|
5 | Variable manufacturing cost | 1,280,000.00 |
|
6 | Fixed manufacturing cost | 320,000.00 | 9,600,000.00 |
7 | Selling and administrative expenses: |
|
|
8 | Variable | $1,080,000.00 |
|
9 | Fixed | 180,000.00 | 1,260,000.00 |
Required: | |||
1. | Prepare an income statement based on the absorption costing concept.* | ||
2. | Prepare an income statement based on the variable costing concept.* | ||
3. | Explain the reason for the difference in the amount of income from operations reported in (1) and (2).
|
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