Question
Carpet Clean manufactures a chemical carpet cleaner. The company was formed during the current year. As a result, there was no beginning inventory. Management is
Carpet Clean manufactures a chemical carpet cleaner. The company was formed during the current year. As a result, there was no beginning inventory. Management is evaluating performance and inventory management issues, and desires to know both net income and ending inventory under generally accepted accounting principles (absorption costing) as well as variable costing methods. Relevant facts are as follows:
Selling price per gallon | $ 13.00 |
Variable manufacturing cost per gallon | 2.50 |
Variable SG&A costs per gallon | 2.37 |
Fixed manufacturing costs | $ 3,125,000 |
Fixed SG&A | 493,000 |
Total gallons produced | 1,633,000 |
Total gallons sold | 1,493,511 |
Worksheet 1
Absorption Costing | |||
Variable manufacturing costs | $ - | ||
Fixed manufacturing costs | - | ||
Cost of goods manufactured | $ - | ||
Cost of goods sold | - | ||
Ending inventory | $ - | ||
Sales | $ - | ||
Cost of goods sold | - | ||
Gross profit | $ - | ||
Selling, general, & administrative costs | |||
Variable | $ - | ||
Fixed | - | - | |
Net income | $ - | ||
Variable Costing | |||
Ending inventory | $ - | ||
Sales | $ - | ||
Variable manufacturing costs | - | ||
Variable manufacturing margin | $ - | ||
Variable SG&A | - | ||
Contribution margin | $ - | ||
Fixed expenses | |||
Manufacturing | $ - | ||
SG&A | - | - | |
Net income | $ - |
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