Jackson Company produces plastic that is used for injection molding applications such as gears for small motors, In 2016, the first year of operations, Jackson produced 4,200 tons of plastic and sold 3,570 tons. In 2017, the production and sales results were exact reversed. In each year, the selling price per ton was $2,400, variable manufacturing costs were 20% of the sales price of units produced, variable selling expenses were 11% of the selling price of units sold, fixed manufacturing costs were $2,856,000, and fixed administrative expenses were $580,000 Your answer is partially correct. Prepare income statements for each year using variable costing JACKSON COMPANY Income Statement For the Year Ended December 31, 2016 Variable Costing 8568CXO Sales For the Year Ended December 31, 2016 Variable Costing $ 8568000 Sales Variable Cost of Goods Sold Inventory, January 1 Variable Costs of Goods Manufactured 2016000 i Variable Costs of Goods Available for Sale 2016000 Inventory, December 31 -302400 Variable Cost of Goods Sold 1713600 Variable Selling Expenses 942480 2656080 Variable Cost of Goods Sold 1713600 i Variable Selling Expenses 942480 2656080i Contribution Margin 5911920 Fixed Manufacturing Overhead $ 2856000 i Fixed Administrative Expenses 5800001 3436000 Net Income/(Loss) $ 2475920 JACKSON COMPANY Income Statement For the Year Ended December 31, 2017 Variable Costing Sales $ 10080000 Variable Cost of Goods Sold Inventory, January 1 3024001 Variable Costs of Goods Manufactured 1713600 i Variable Costs of Goods Available for Sale 2016000 Inventory, December 31 Variable Cost of Goods Sold 2016000 Variable Selling Expenses 1108800 i 3124800 i Contribution Margin 6955200 Fixed Manufacturing Overhead $ 2856000 i Fixed Administrative Expenses 5800001 3436000 Net Income/(Loss) 3519200 Prepare income statements for each year using absorption costing JACKSON COMPANY Income Statement For the Year Ended December 31, 2016 Absorption Costing Sales 8568000 Cost of Goods Sold Inventory, January 1 0 Costs of Goods Manufactured 4872000 Costs of Goods Available for Sale 4872000 Inventory December 31 730800 1 COSTS OF GOOD Manufactured 487 ZUUU Costs of Goods Available for Sale 4872000 Inventory, December 31 730800 Cost of Goods Sold 4141200 Gross Profit 4426800 Variable Selling Expenses 9424801 Fixed Administrative Expenses 580000 1522480 i Net Income/(Loss $ 2904320 JACKSON COMPANY Income Statement For the Year Ended December 31, 2017 Absorption Costing Sales 10080000 Cost of Goods Sold Inventory, January 1 $ 730800 i Costs of Goods Manufactured 4569600 i Costs of Goods Available for Sale 5300400 Inventory, December 31 0 Costs of Goods Available for Sale 5300400 i Inventory, December 31 0 Cost of Goods Sold 5300400 Gross Profit 4779600 Variable Selling Expenses 1108800 Fixed Administrative Expenses 580000 168800 Net Income/(Loss) $ 3090800 Reconcile the differences each year in net income under the two costing approaches. 2016 2017 Variable costing net income $ A $ Fixed manufacturing overhead expensed with variable costing $ 11 TIM Less: Fixed manufacturing overhead expensed with absorption costing Difference Absorption costing net income $ Jackson Company produces plastic that is used for injection molding applications such as gears for small motors, In 2016, the first year of operations, Jackson produced 4,200 tons of plastic and sold 3,570 tons. In 2017, the production and sales results were exact reversed. In each year, the selling price per ton was $2,400, variable manufacturing costs were 20% of the sales price of units produced, variable selling expenses were 11% of the selling price of units sold, fixed manufacturing costs were $2,856,000, and fixed administrative expenses were $580,000 Your answer is partially correct. Prepare income statements for each year using variable costing JACKSON COMPANY Income Statement For the Year Ended December 31, 2016 Variable Costing 8568CXO Sales For the Year Ended December 31, 2016 Variable Costing $ 8568000 Sales Variable Cost of Goods Sold Inventory, January 1 Variable Costs of Goods Manufactured 2016000 i Variable Costs of Goods Available for Sale 2016000 Inventory, December 31 -302400 Variable Cost of Goods Sold 1713600 Variable Selling Expenses 942480 2656080 Variable Cost of Goods Sold 1713600 i Variable Selling Expenses 942480 2656080i Contribution Margin 5911920 Fixed Manufacturing Overhead $ 2856000 i Fixed Administrative Expenses 5800001 3436000 Net Income/(Loss) $ 2475920 JACKSON COMPANY Income Statement For the Year Ended December 31, 2017 Variable Costing Sales $ 10080000 Variable Cost of Goods Sold Inventory, January 1 3024001 Variable Costs of Goods Manufactured 1713600 i Variable Costs of Goods Available for Sale 2016000 Inventory, December 31 Variable Cost of Goods Sold 2016000 Variable Selling Expenses 1108800 i 3124800 i Contribution Margin 6955200 Fixed Manufacturing Overhead $ 2856000 i Fixed Administrative Expenses 5800001 3436000 Net Income/(Loss) 3519200 Prepare income statements for each year using absorption costing JACKSON COMPANY Income Statement For the Year Ended December 31, 2016 Absorption Costing Sales 8568000 Cost of Goods Sold Inventory, January 1 0 Costs of Goods Manufactured 4872000 Costs of Goods Available for Sale 4872000 Inventory December 31 730800 1 COSTS OF GOOD Manufactured 487 ZUUU Costs of Goods Available for Sale 4872000 Inventory, December 31 730800 Cost of Goods Sold 4141200 Gross Profit 4426800 Variable Selling Expenses 9424801 Fixed Administrative Expenses 580000 1522480 i Net Income/(Loss $ 2904320 JACKSON COMPANY Income Statement For the Year Ended December 31, 2017 Absorption Costing Sales 10080000 Cost of Goods Sold Inventory, January 1 $ 730800 i Costs of Goods Manufactured 4569600 i Costs of Goods Available for Sale 5300400 Inventory, December 31 0 Costs of Goods Available for Sale 5300400 i Inventory, December 31 0 Cost of Goods Sold 5300400 Gross Profit 4779600 Variable Selling Expenses 1108800 Fixed Administrative Expenses 580000 168800 Net Income/(Loss) $ 3090800 Reconcile the differences each year in net income under the two costing approaches. 2016 2017 Variable costing net income $ A $ Fixed manufacturing overhead expensed with variable costing $ 11 TIM Less: Fixed manufacturing overhead expensed with absorption costing Difference Absorption costing net income $