Question
Adria Lopez expected sales of her line of computer workstation furniture to equal 300 workstations (at a sales price of $3,000) for 2014. The workstations'
Adria Lopez expected sales of her line of computer workstation furniture to equal 300 workstations (at a sales price of $3,000) for 2014. The workstations' manufacturing costs include the following. Adria is considering how many workstations to produce in 2014. She is confident that she will be able to sell any workstations in her 2014 ending inventory during 2015. However, Adria does not want to overproduce as she does not have sufficient storage space for many more workstations.
Direct materials $ 800 per unit Direct labor $ 400 per unit Variable overhead $ 100 per unit Fixed overhead $ 24,000 per year The selling expenses related to these workstations follow.
Variable selling expenses $ 50 per unit Fixed selling expenses $ 4,000 per year
Complete the following income statements using absorption costing. Cost of Goods Sold: 300 workstations 320 workstations ________________ ________________ ________________ ________________ Cost of goods sold per unit Number of workstations sold Total cost of goods sold Absorption costing income statement: 300 workstations 320 workstations Sales.......................................................................... Cost of goods sold................................................... Gross margin............................................................ Selling general and administrative expenses....
Under absorption costing, can the difference between production volume and sales volume affect the reported net income (loss)?Required: 1.
2. Complete the following income statements using variable costing.
Any help is much appreciated!!
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