- BI U HV Numb Copy Format Painter Clipboard Alignment Font fo =1F[(C19-0),0,113) B46 16 17 Income statement Absorption costing $2,400,000 $1,400,000 315,000 $1,715,000 343,000 19 Sales 20 Cost of goods sold 21 Variable manufacturing costs 22 Fixed manufacturing costs 23 Total goods available for sale 24 Less ending inventory 25 Cost of goods sold 26 Gross profit 27 Selling expenses 28 Fixed selling expenses 29 Variable selling expenses 30 Total seling expenses 31 Operating income 1,372,000 $1,028,000 $100,000 160,000 260,000 $768,000 34 Income statement: Variable costing $2,400,000 $1,400,000 280,000 36 Sales 37 Cost of goods sold 38 Variable manufacturing costs 39 Less ending inventory 40 Variable cost of goods sold 41 Manufacturing margin 42 Variable selling expenses 43 Contribution margin 44 Fixed costs 45 Fixed manufacturing costs 46 Foed selling expenses 47 Total faced costs 48 Operating income 1.120.000 $1,280,000 160,000 $1,120,000 $315,000 100 000! 415,000 $705,000 Type here to search ABC ABC What Se Lesson #10 - Product Costing - Doan Nguyenxls - Compatibility Mode. AutoSave O File Home Hes Page Layout Formulas Data Insert View Review Help General X Cut Anel MT BTU - B CopyB TU 12AAEEE -A. E 29 Wrap Test Merge & Center - $ % -8 Con Format Painter Clipboard Number H 114 D E F G 1 Explain why the operating income calculated by the absorption method is not the same 2 as that calculated by the variable method 9 To determine the effect of different levels of producation on the company's income, move to cell B7 (actual production) 10 on the VARCOST worksheet and change the number in B7 to different production levels given in the table below. 11 The first level 100,000, is the current level. What happens to the operating income on both statements as production 12 levels change? Enter the operating incomes in the following table: 13 14 Operating Income - January Production Production Production Level Level Level 100,000 90,000 80,000 18 Absorption 19 Variable 16 21 Does the level of production affect income under either costing method? Explain your findings O Type here to search ABC ABC What Alignment Clipboard 846 fo =ff(C19=0,0,813) 3 Variable Costing 4 5 Data Section 6 The records of Ajak Corporation contain the following information for the month of January 7 Actual production in units 100,000 8 Sales in units 80,000 9 Sales price per unit $30 10 Variable manufacturing costs per unit 11 Variable selling costs per unit 12 Fixed manufacturing costs $315,000 13 Fixed selling expenses $100,000 14 The company has no beginning inventory Answer Section $2 17 Income statement Absorption costing $2,400,000 19 Sales 20 Cost of goods sold 21 Variable manufacturing costs 22 Fixed manufacturing costs 23 Total goods available for sale 24 Less ending inventory Cost of goods sold 26 Gross profit 27 Selling expenses Fored selling expenses 29 Variable selling expenses Total selling expenses 31 Operating income $1,400,000 315,000 $1715,000 343,000 1,372,000 $1,028,000 30 $100,000 160,000 260 000 $768 000 34 Income statement Vanable costing 35 37 Cost of goods sold 38 Variable manufacturing costs 39 Less ending inventory Vincent $2,400,000 $1,400,000 280,000 O Type here to search 1 120000
