Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Exercise 7-12 Variable Costing Income Statement; Reconciliation (L07-2, LO7-3] Whitman Company has just completed its first year of operations. The company's absorption costing income statement

image text in transcribed
image text in transcribed
image text in transcribed
Exercise 7-12 Variable Costing Income Statement; Reconciliation (L07-2, LO7-3] Whitman Company has just completed its first year of operations. The company's absorption costing income statement for the year follows: Whitman Company Income statement Sales (39,000 units * $41.10 per unit) Cost of goods sold (39,000 units $22 per unit) Gross margin Selling and administrative expenses Ket operating income $1,602,900 ASB,000 744,900 409,500 $ 335,400 The company's selling and administrative expenses consist of $292,500 per year in fixed expenses and $3 per unit sold in variable expenses. The $22 unit product cost given above is computed as follows: Direct materials Direet Labor Variable manufacturing overhead Pixed manufacturing overbead ($260,000 - 52,000 units) Absorption costing unit product cont $ 10 5 2 22 Required: 1. Redo the company's income statement in the contribution format using variable costing. 2. Reconcile any difference between the net operating income on your variable costing Income statement and the net operating Income on the absorption costing income statement above: Complete this question by entering your answers in the tabs below. Required 1 Required 2 Redo the company's income statement in the contribution format using variable costing. Whitman Company Variable Costing Income Statement Required 2 > het operating income on your variable costing income statement and the net operating come on the absorption costing income statement above. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Reconcile any difference between the net operating income on your variable costing income statement and the net operating income on the absorption costing Income statement above. (Enter any losses or deductions as a negative value.) Reconciliation of Variable Costing and Absorption Costing Not Operating Incomes Variable costing net operating income Absorption costing net operating income

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting

Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer

13th Edition

978-0073379616, 73379611, 978-0697789938

More Books

Students also viewed these Accounting questions

Question

3 > O Actual direct-labour hours Standard direct-labour hours...

Answered: 1 week ago