Question
Income Statements, Variable and Absorption Costing The following information pertains to Vladamir, Inc., for last year: Beginning inventory, units 1,400 Units produced 100,000 Units sold
Income Statements, Variable and Absorption Costing
The following information pertains to Vladamir, Inc., for last year:
Beginning inventory, units | 1,400 | ||
Units produced | 100,000 | ||
Units sold | 101,000 | ||
Variable costs per unit: | |||
Direct materials | $8.00 | ||
Direct labor | $9.00 | ||
Variable overhead | $2.00 | ||
Variable selling expenses | $2.00 | ||
Fixed costs per year: | |||
Fixed overhead | $300,000 | ||
Fixed selling and administrative expenses | $230,000 |
There are no work-in-process inventories. Normal activity is 100,000 units. Expected and actual overhead costs are the same. Costs have not changed from one year to the next.
Required:
Question Content Area
1. How many units are in ending inventory? fill in the blank dfb40f09efa8ff3_1 units
2. Without preparing an income statement, indicate what the difference will be between variable-costing income and absorption-costing income. $fill in the blank dfb40f09efa8ff3_2
Question Content Area
3a. Assume the selling price per unit is $32. Prepare an income statement using variable costing.
Fixed overheadFixed selling and administrative expensesSalesVariable cost of goods soldVariable selling expensesSales | $Sales |
Less: | |
Fixed overheadFixed selling and administrative expensesSalesVariable cost of goods soldVariable cost of goods sold | Variable cost of goods sold |
Fixed overheadFixed selling and administrative expensesSalesVariable selling expensesVariable selling expenses | Variable selling expenses |
Contribution margin | $fill in the blank c6db9b074fad004_7 |
Less: | |
Fixed overheadSalesVariable cost of goods soldVariable selling expensesFixed overhead | Fixed overhead |
Fixed selling and administrative expensesSalesVariable cost of goods soldVariable selling expensesFixed selling and administrative expenses | Fixed selling and administrative expenses |
Operating income | $fill in the blank c6db9b074fad004_12 |
Question Content Area
3b. Assume the selling price per unit is $32. Prepare an income statement using absorption costing.
Cost of goods soldFixed selling and administrative expensesSalesSales | $Sales |
Less: Cost of goods soldLess: Fixed selling and administrative expensesLess: SalesLess: Cost of goods sold | Less: Cost of goods sold |
Gross profit | $fill in the blank 238376025fb0ffe_5 |
Less: Cost of goods soldLess: Selling and administrative expensesLess: SalesLess: Selling and administrative expenses | Less: Selling and administrative expenses |
Operating income | $fill in the blank 238376025fb0ffe_8 |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started