Question
During the first month of operations ended August 31, Kodiak Fridgeration Company manufactured 80,000 mini refrigerators, of which 72,000 were sold. Operating data for the
During the first month of operations ended August 31, Kodiak Fridgeration Company manufactured 80,000 mini refrigerators, of which 72,000 were sold. Operating data for the month are summarized as follows:
1 | Sales |
| $10,800,000.00 |
2 | Manufacturing costs: |
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3 | Direct materials | $6,400,000.00 |
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4 | Direct labor | 1,600,000.00 |
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5 | Variable manufacturing cost | 1,280,000.00 |
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6 | Fixed manufacturing cost | 320,000.00 | 9,600,000.00 |
7 | Selling and administrative expenses: |
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8 | Variable | $1,080,000.00 |
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9 | Fixed | 180,000.00 | 1,260,000.00 |
Required: | |||
1. | Prepare an income statement based on the absorption costing concept.* | ||
2. | Prepare an income statement based on the variable costing concept.* | ||
3. | Explain the reason for the difference in the amount of income from operations reported in (1) and (2).
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Absorption Costing Income Statement
Shaded cells have feedback.
1. Prepare an income statement based on the absorption costing concept. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. A colon (:) will automatically appear if required. Enter Inventory, August 31 as a negative number using a minus sign. If a net loss is incurred, enter that amount as a negative number using a minus sign.
Score: 45/64
Kodiak Fridgeration Company |
Absorption Costing Income Statement |
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Points:
11.25 / 16
Feedback
Check My Work
Sales - (Cost of Goods Manufactured - Ending Inventory*) = Gross Profit; Gross Profit - Selling and Administrative Expenses = Income from Operations.
* (Manufactured Units - Sold Units) x (Total Manufacturing Costs/Manufactured Units)
Variable Costing Income Statement
Shaded cells have feedback.
2. Prepare an income statement based on the variable costing concept. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. A colon (:) will automatically appear if required. Enter Inventory, August 31 as a negative number using a minus sign. If a net loss is incurred, enter that amount as a negative number using a minus sign.
Score: 72/106
Kodiak Fridgeration Company |
Variable Costing Income Statement |
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