Aces Incorporated, a manufacturer of tennis rackets, began operations this year. The company produced $5,300$ rackets and sold $4,200.$ Each racket was sold at a price of $$83.$ Fixed overhead costs are $$65,190$ for the year, and fixed selling and administrative costs are $$64,500$ for the year. The company also reports the following per unit variable costs for the year:

Direct materials                                                                            $ $11\mathrm{.}79$

Direct labor                                                                                       $7\mathrm{.}79$

 

 Variable overhead $\mathrm{ \; \; \; \; \; \; \; \; \; \; \; \; \; \; \; \; \; \; \; \; \; \; \; \; \; \; \; \; \; \; \; \; \; \; \; \; \; \; \; \; \; \; \; 4}\mathrm{.}72$ 

 

Variable selling and administrative expenses                            $1\mathrm{.}30$

Required:

Prepare an income statement under absorption costing.

Answer rating: 100% (QA)

To prepare an income statement under absorption costing we need to consider both fixed and variable ... View the full answer