approach LO 11-3

AJ Manufacturing Company incurred $54,000 of fixed product cost and $43,200 of variable product cost during its first year of operation. Also during its first year, AJ incurred $17,200 of fixed selling and administrative costs and $13,800 of variable selling and administrative costs. The company sold all of the units it produced for $176,000.

Required

a.

Prepare an income statement using the format required by generally accepted accounting Principles (GAAP).

AJ MANUFACTURING COMPANY
Income Statement

b.

Prepare an income statement using the contribution margin approach.

AJ MANUFACTURING COMPANY
Income Statement