Absorption and Variable Costing Income Statements: Production Exceeds Sales

Glenview Company sells its product at a unit price of $$13\mathrm{.}00.$ Unit manufacturing costs are direct materials, $$2\mathrm{.}50$; direct labor, $$3\mathrm{.}00$; and variable manufacturing overhead, $$1\mathrm{.}50.$ Total fixed manufacturing costs are $$50,000$ per year. Selling and administrative expenses are $$1\mathrm{.}00$ per unit variable and $$20,000$ per year fixed. Though $50,000$ units were produced during $2017,$ only $44,000$ units were sold. There was no beginning inventory.

$($a$)$ Prepare a functional income statement using absorption costing. $($Do not use negative signs with your answers.$)$

Glenview Company

Functional $($Absorption Costing$)$ Income Statement

For the year $2017$

Sales Answer

$0$

Cost of goods sold Answer

$0$

Gross profit Answer

Other expenses:

Variable selling and administrative Answer

$0$

Fixed selling and administrative Answer

$0$

Answer

$0$

Net income Answer

$78,000$

$($b$)$ Prepare a contribution income statement using variable costing. $($Do not use negative signs with your answers.$)$

Glenview Company

Contribution $($Variable Costing$)$ Income Statement

For the Year $2017$

Sales Answer

$0$

Variable expenses:

Cost of goods sold Answer

$0$

Selling and administrative Answer

$0$

Answer

$0$

Contribution margin Answer

$0$

Fixed expenses:

Manufacturing overhead Answer

$0$

Selling and administrative Answer

$0$

Answer

$0$

Net income Answer

$0$