Absorption costing income statement On June 30, the end of the first month of operations, Tudor Manufacturing Co. prepared the following income statement, based on
Absorption costing income statement
On June 30, the end of the first month of operations, Tudor Manufacturing Co. prepared the following income statement, based on the variable costing concept:
Sales (340,000 units) | $5,430,000 | |||
Variable cost of goods sold: | ||||
Variable cost of goods manufactured (400,000 units $12 per unit) | $4,800,000 | |||
Less ending inventory (60,000 units $12 per unit) | 720,000 | |||
Variable cost of goods sold | 4,080,000 | |||
Manufacturing margin | $1,350,000 | |||
Variable selling and administrative expenses | 60,000 | |||
Contribution margin | $1,290,000 | |||
Fixed costs: | ||||
Fixed manufacturing costs | $120,000 | |||
Fixed selling and administrative expenses | 56,000 | 176,000 | ||
Income from operations | $1,114,000 |
This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.
Open spreadsheet
a. Prepare an absorption costing income statement. Round your answers to the nearest dollar.
Tudor Manufacturing Co. | ||||
Income Statement-Absorption Costing | ||||
For the Month Ended June 30 | ||||
Cost of goods manufacturedEnding inventoryGross profitSalesSelling and administrative expenses | $fill in the blank 3 | |||
Cost of goods sold: | ||||
Cost of goods manufacturedCost of goods soldGross profitSalesSelling and administrative expenses | $fill in the blank 5 | |||
Less cost of goods soldLess ending inventoryLess gross profitLess salesLess selling and administrative expenses | fill in the blank 7 | |||
Cost of goods manufacturedCost of goods soldGross profitSalesSelling and administrative expenses | fill in the blank 9 | |||
Cost of goods manufacturedCost of goods soldGross profitSalesSelling and administrative expenses | $fill in the blank 11 | |||
Cost of goods manufacturedCost of goods soldGross profitSalesSelling and administrative expenses | fill in the blank 13 | |||
Income from operations | $fill in the blank 14 |
b. Reconcile the variable costing income from operations of $1,114,000 with the absorption costing income from operations determined in (a). Round your answers to the nearest dollar.
Reconciliation of Variable and Absorption Costing Income | |
Variable costing income from operations | $fill in the blank 15 |
Absorption costing income from operations | fill in the blank 16 |
Difference | $fill in the blank 17 |
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