Individual Homework Assignment #5 Spring 2019 Page 2 of 12 Problem #1: Absorption Reporting vs. Contribution Reporting (30 points) The following data was extracted from the accounting records of Lopez Fashion Idol Corp.: Current Monthly Volume 90,000 units $80.00 per unit Selling Price Manufacturing Costs: Direct Materials Direct Labor Variable Overhead Fixed Overhead $12.50 per unit $11.50 per unit $11.40 per unit $12.00 per unit Selling, General, and Administrative Costs: Sales Commissions Other Selling General and Administrative of Sales per unit plus $432,000 per month 2.00% $7.00 $648,000 per month 1. Prepare an absorption format income statement for December 2018 for Lopez Fashion Idol Corp. at the current volume. (12 points) Lopez Fashion Idol Corp Income Statement: Absorption Format For the Month Ended December 31, 2018 Supporting Calculations Required: Individual Homework Assignment #5 Spring 2019 Page 3 of 12 2. Prepare a contribution format income statement for December 2018 for Lopez Fashion Idol Corp. at the current volume. (12 points) Lopez Fashion Idol Corp. Income Statement: Contribution Format For the Month Ended December 31, 2018 Supporting Calculations Required: Individual Homework Assignment #5 Spring 2019 Page 2 of 12 Problem #1: Absorption Reporting vs. Contribution Reporting (30 points) The following data was extracted from the accounting records of Lopez Fashion Idol Corp.: Current Monthly Volume 90,000 units $80.00 per unit Selling Price Manufacturing Costs: Direct Materials Direct Labor Variable Overhead Fixed Overhead $12.50 per unit $11.50 per unit $11.40 per unit $12.00 per unit Selling, General, and Administrative Costs: Sales Commissions Other Selling General and Administrative of Sales per unit plus $432,000 per month 2.00% $7.00 $648,000 per month 1. Prepare an absorption format income statement for December 2018 for Lopez Fashion Idol Corp. at the current volume. (12 points) Lopez Fashion Idol Corp Income Statement: Absorption Format For the Month Ended December 31, 2018 Supporting Calculations Required: Individual Homework Assignment #5 Spring 2019 Page 3 of 12 2. Prepare a contribution format income statement for December 2018 for Lopez Fashion Idol Corp. at the current volume. (12 points) Lopez Fashion Idol Corp. Income Statement: Contribution Format For the Month Ended December 31, 2018 Supporting Calculations Required