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Exercise 19-3 Income reporting under absorption costing and variable costing LO P2 Sims Company, a manufacturer of tablet computers, began operations on January 1, 2019.
Exercise 19-3 Income reporting under absorption costing and variable costing LO P2
Sims Company, a manufacturer of tablet computers, began operations on January 1, 2019. Its cost and sales information for this year follows.
Manufacturing costs | |||
Direct materials | $ | 40 | per unit |
Direct labor | $ | 60 | per unit |
Overhead costs | |||
Variable | $ | 40 | per unit |
Fixed | $ | 6,300,000 | (per year) |
Selling and administrative costs for the year | |||
Variable | $ | 725,000 | |
Fixed | $ | 4,750,000 | |
Production and sales for the year | |||
Units produced | 105,000 | units | |
Units sold | 75,000 | units | |
Sales price per unit | $ | 360 | per unit |
1. Prepare an income statement for the year using variable costing. 2. Prepare an income statement for the year using absorption costing.
Required 1 Required 2 Prepare an income statement for the year using variable costing. SIMS COMPANY Variable Costing Income Statement Net income (loss) Required 1 Required 2 Prepare an income statement for the year using absorption costing. SIMS COMPANY Absorption Costing Income Statement Net income (loss)Step by Step Solution
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