2.

Trez Company began operations this year. During this first year, the company produced 100,000 units and sold 80,000 units. The absorption costing income statement for this year follows. Sales (80,000 units x $50 per unit) Cost of goods sold Beginning inventory Cost of goods manufactured (100,000 units x $30 per unit) Cost of goods available for sale Ending inventory (20,000 x $30) Cost of goods sold Gross margin Selling and administrative expenses $4,000,000 0 3,000,000 3,000,000 600,000 2,400,000 1,600,000 560,000 $1,040,000 Net income Additional Information a. Selling and administrative expenses consist of $400,000 in annual fixed expenses and $2 per unit in variable selling and administrative expenses b. The company's product cost of $30 per unit is computed as follows. 4 per unit $16 per unit 3 per unit 7 per unit Direct materials Direct labor Variable overhead Fixed overhead ($700,000 100,000 units) Required: 1. Prepare an income statement for the company under variable costing. 2. Fill in the blanks Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare an income statement for the company under variable costing Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare an income statement for the company under variable costing. TREZ Company Variable Costing Income Statement Sales Less: Variable costs Direct materials Direct labor Variable overhead Net income (loss) Required 2 Required 1 Complete this question by entering your answers in the tabs below. Required 2 Required 1 Fill in the blanks. The dollar difference in variable costing income and absorption costing income units fixed overhead per unit. Required 1 Required 2> Jacquie Inc. reports the following annual cost data for its single product. Normal production and sales level Sales price 80,000 units 58.00 per unit 11.00 per unit 8.50 per unit 13.00 per unit $1,440,000 in total Direct materials Direct labor $ Variable overhead Fixed overhead Complete the below table using absorption costing. (Round cost per unit answers to 2 decimal places.) Answer is not complete. Production volume 120,000 units Cost of goods sold: 80,000 units Direct materials per unit 11.00 11.00 Direct labor per unit 8.50 8.50 Variable overhead per unit 13.00 13.00 Fixed overhead per unit 18.00 12.00 44.50 50.50 Cost of goods sold per unit Number of units sold Total cost of goods sold Jacquie Inc. Income statement through gross margin Sales volume 80,000 units 80,000 units 51 S Cost of goods sold 45 Sales 0 0 Contribution margin 51 45 If Jacquie increases its production to 120,000 units, while sales remain at the current 80,000-unit level, by how much would the company's gross margin increase or decrease under absorption costing? Assume the company has idle capacity to double current production. Gross margin increases by Number of units sold Change in fixed overhead cost per unit Change in cost of goods sold: 0