Accounting Question

Question 2: Walsh Company manufactures 30,000 units during July. There were no units in inventory on July 1. Informatin on costs and expenses for July is as follows: Total $ Number of units Unit $ Manufacturing costs Variable 560,000 30,000 22 Fixed 300,000 30,000 10 960,000 Selling and Administrative expenses Variable 200,000 25,000 8 Fixed 160,000 Total 360,000 If the company sells 25,000 units at $75 ( units manufactured exceeds units sold), prepar an income statement for July using: A. Absorption Costing B. Varibale Costing Solution: Absorption Costing Income Statement $ Sales Costs of Goods Sold Costs of Goods Manufactured Less Ending Inventory Total Costs of Goods Sold Gross Profit less Selling and Administrative expenses Income from Operation Variable Costing Income Statement $ $ Sales Variable Costs of Goods Sold Variable Manufacturing costs less Ending Inventory Total Variable COGS Manufacturing Margin Less Variable Selling and Administrative Expenses Contribution margin Less Fixed costs Fixed manufacturing cost Fixed Selling and Administrative expenses Total Fixed costs Income from Operation