15 Question 3 Ch. Absorbo Company makes and sells computer stands for the home office market. The following information is available regarding the company's operations, sales, and costs. Sales 2008 (Actual) 2009 (Expected) Quantity Revenue 54,000 units 54,000 units $13,500,000 60,000 units $11,800,000 $ 300,000 $13,500,000 50,000 units $10,250,000 Production Quantity Costs Cost of goods manufactured Fixed expenses Selling and administrative Net income (absorption costing) Fixed manufacturing costs deferred in inventory Fixed manufacturing costs released from inventory 300,000 S 560,000 $ 100,000 250,000 Note: All unil variable costs were assumed in 2009 to remain at thelr 2008 levels. In addilion, fixed manufacluring costs were also assumed to be the same in 2009 as in 2008. Required a. Calculate the variable costing net income for 2009 by adjusting the absorption costing net income. 3 6 b. Determine the following: 1) Fixed manufacturing cost per unit in 2009 ii) Total fixed manufacturing costs for 2009 ii) Contribution margin for 2009 Prepare a variable costing income statement for 2009 showing the variable selling, variable manufacturing, and fixed selling costs. 6 c. 15 Question 3 Ch. Absorbo Company makes and sells computer stands for the home office market. The following information is available regarding the company's operations, sales, and costs. Sales 2008 (Actual) 2009 (Expected) Quantity Revenue 54,000 units 54,000 units $13,500,000 60,000 units $11,800,000 $ 300,000 $13,500,000 50,000 units $10,250,000 Production Quantity Costs Cost of goods manufactured Fixed expenses Selling and administrative Net income (absorption costing) Fixed manufacturing costs deferred in inventory Fixed manufacturing costs released from inventory 300,000 S 560,000 $ 100,000 250,000 Note: All unil variable costs were assumed in 2009 to remain at thelr 2008 levels. In addilion, fixed manufacluring costs were also assumed to be the same in 2009 as in 2008. Required a. Calculate the variable costing net income for 2009 by adjusting the absorption costing net income. 3 6 b. Determine the following: 1) Fixed manufacturing cost per unit in 2009 ii) Total fixed manufacturing costs for 2009 ii) Contribution margin for 2009 Prepare a variable costing income statement for 2009 showing the variable selling, variable manufacturing, and fixed selling costs. 6 c