During the first month of operations ended July 31, YoSan Inc. manufactured 2,400 flat panel televisions, of
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Question:
During the first month of operations ended July 31, YoSan Inc. manufactured 2,400 flat panel televisions, of which 2,000 were sold. Operating data for the month are summarized as follows:
Sales | $2,150,000 | |
Manufacturing costs: | ||
Direct materials | $960,000 | |
Direct labor | 420,000 | |
Variable manufacturing cost | 156,000 | |
Fixed manufacturing cost | 288,000 | 1,824,000 |
Selling and administrative expenses: | ||
Variable | $204,000 | |
Fixed | 96,000 | 300,000 |
Required:
1. Prepare an income statement based on the absorption costing concept.
YoSan Inc. | ||
Absorption Costing Income Statement | ||
For the Month Ended July 31 | ||
$ | ||
Cost of goods sold: | ||
$ | ||
$ | ||
$ |
2. Prepare an income statement based on the variable costing concept.
YoSan Inc. | ||
Variable Costing Income Statement | ||
For the Month Ended July 31, 2016 | ||
$ | ||
Variable cost of goods sold: | ||
$ | ||
$ | ||
$ | ||
Fixed costs: | ||
$ | ||
$ |
3. Explain the reason for the difference in the amount of income from operations reported in (1) and (2).
Related Book For
Financial and Managerial Accounting
ISBN: 978-1285078571
12th edition
Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac
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