Income Statements under Absorption Costing and Variable Costing

Joplin Industries Inc. manufactures and sells high$-$quality sporting goods equipment under its highly recognizable J$-$Sports logo$.$ The company began operations on May $1$ and operated at $100\%$ of capacity $(51,700$ units$)$ during the first month, creating an ending inventory of $4,700$ units. During June, the company produced $47,000$ garments during the month but sold $51,700$ units at $$95$ per unit. The June manufacturing costs and selling and administrative expenses were as follows:

Number of Units Unit Cost Total

Cost

Manufacturing costs in June $1$ beginning inventory:

Variable $4,700$ $$38\mathrm{.}00$ $$178,600$

Fixed $4,70014\mathrm{.}0065,800$

Total $$52\mathrm{.}00$ $$244,400$

Manufacturing costs in June:

Variable $47,000$ $$38\mathrm{.}00$ $$1,786,000$

Fixed $47,00015\mathrm{.}40723,800$

Total $$53\mathrm{.}40$ $$2,509,800$

Selling and administrative expenses in June:

Variable $51,70018\mathrm{.}20$ $$940,940$

Fixed $51,7007\mathrm{.}00361,900$

Total $25\mathrm{.}20$ $$1,302,840$

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a$.$ Prepare an income statement according to the absorption costing concept for June.

Joplin Industries Inc.

Absorption Costing Income Statement

For the Month Ended June $30$

$$-$ Select $-$

Cost of goods sold:

$$-$ Select $-$

$-$ Select $-$

$-$ Select $-$

$$-$ Select $-$

$-$ Select $-$

$$-$ Select $-$

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b$.$ Prepare an income statement according to the variable costing concept for June.

Joplin Industries Inc.

Variable Costing Income Statement

For the Month Ended June $30$

$$-$ Select $-$

$-$ Select $-$

$$-$ Select $-$

$-$ Select $-$

$$-$ Select $-$

Fixed costs:

$$-$ Select $-$

$-$ Select $-$

$-$ Select $-$

$$-$ Select $-$

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