Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

It is the end of 2020. Goldberg All - Fixed Corporation began operations in January 2019. The company is so named because it has no

image text in transcribed
It is the end of 2020. Goldberg All - Fixed Corporation began operations in January 2019. The company is so named because it has no variable costs. All its costs are fixed; they do not vary with output. Goldberg All - Fixed Corp. is located on the bank of a river and has its own hydroelectric plant to supply power, light, and heat. The company manufactures a synthetic fertilizer from air and river water and sells its product at a price that is not expected to change. It has a small staff of employees, all paid fixed annual salaries. The output of the plant can be increased or decreased by pressing a few buttons on a keyboard. The following budgeted and actual data are for the operations of Goldberg All - Fixed. (Click the icon to view the budgeted and actual data.) Read the requirements. Requirement 1. Prepare income statements with one column for 2019, one column for 2020, and one column for the 2 years together using (a) variable costing and (b) absorption costing. (Use parentheses or a minus sign for an operating loss.) Start by preparing the (a) variable costing income statement for 2019, 2020, and the 2 year total. i Data Table X 2019 2020 Total Revenue Fixed costs: The company uses budgeted production as the denominator level and Manufacturing costs writes off any production-volume variance to cost of goods sold. Operating costs 2019 2020 Total fixed costs Sales 30,000 tons 30,000 tons Production 60,000 tons 0 tons Operating income (loss) Selling price $125 per ton $125 per ton Now prepare the (b) absorption costing income statement for 2019, 2020, and the 2 year total. (Enter a "0" for any $0 balances. Use parentheses or a minus sign for Costs (all fixed): units of production as the denominator level in the allocation rate.) Manufacturing $3, 180,000 $3, 180,000 2019 2020 Total Operating (nonmanufacturing) $105,000 $ 105,000 Revenue Management adopted the policy, effective January 1, 2020, of Cost of goods sold producing only as much product as needed to fill sales orders. During 2020, sales were the same as for 2019 and were filled entirely from Beginning inventory inventory at the start of 2020. Allocated fixed manufacturing costs Print Done Choose from any list or enter any number in the input fields and then continue to the next

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered 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

Financial Accounting Theory

Authors: William R Scott

5th Edition

0132072866, 978-0132072861

Students also viewed these Accounting questions