Question
Liquid Energy Contribution Margin Income Statement (Variable Costing) Month Ended March 31 Sales revenue $390,000 Deduct: Variable expenses: Variable cost of goods sold: Beginning finished
Liquid Energy | |||||||
Contribution Margin Income Statement (Variable Costing) | |||||||
Month Ended March 31 | |||||||
| Sales revenue |
| $390,000 |
| |||
| Deduct: Variable expenses: |
|
|
| |||
|
| Variable cost of goods sold: |
|
|
| ||
|
|
| Beginning finished goods inventory | $0 |
|
| |
|
|
| Variable cost of goods manufactured | 260,000 |
|
| |
|
|
| Variable cost of goods available for sale | 260,000 |
|
| |
|
|
| Ending finished goods inventory | (60,000) |
|
| |
|
|
| Variable cost of goods sold | 200,000 |
|
| |
|
| Sales commission expense | 30,000 | (230,000) |
| ||
| Contribution margin |
| 160,000 |
| |||
| Deduct: Fixed expenses: |
|
|
| |||
|
| Fixed manufacturing overhead | 130,500 |
|
| ||
|
| Fixed marketing and administrative expenses | 20,000 | (150,500) |
| ||
| Operating income |
| $9,500 |
|
Absorption |
| Variable | |
| Costing |
| Costing |
Direct materials | $6.00 | $6.00 | |
Direct labour | 3.00 | 3.00 | |
Variable manufacturing overhead | 11.00 | 11.00 | |
Fixed manufacturing overhead | 9.00 | * |
|
Total cost per case | $29.00 |
| $20.00 |
*$130,500 fixed manufacturing overhead/14,500 cases= $9
Sales price per case
$39.00
Sales commission per case
$3.00
Units in beginning inventory 0003,000
Liquid Energy incurs the following costs for its powdered sports beverage mix in March:
Suppose that during April, the company produces 14,500 cases of powdered drink mix and sells 16,000 cases. Sale price, variable cost per case, and total fixed expenses remain the same as in March. Prepare the April income statement using variable costing.Prepare the April income statement using variable costing.
Liquid Energy | ||||||||
Contribution Margin Income Statement (Variable Costing) | ||||||||
Month Ended April 30 | ||||||||
|
|
|
|
| ||||
|
|
|
|
| ||||
|
| Variable cost of goods sold: |
|
|
| |||
|
|
|
|
|
|
| ||
|
|
|
|
|
|
| ||
|
|
|
|
|
|
| ||
|
|
|
|
|
|
| ||
|
|
|
|
|
|
| ||
|
|
|
|
|
| |||
|
|
|
|
| ||||
|
|
|
|
| ||||
|
|
|
|
|
| |||
|
|
|
|
|
| |||
|
|
|
|
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