Old MathJax webview

Q2

please answer both as required to put in fields

Trez Company began operations this year. During this first year, the company produced 100,000 units and sold 80,000 units. absorption costing Income statement for this year follows. $4,490,880 Sales (80,000 units $se per unit) Cost of goods sold Beginning inventory Cost of goods manufactured (100,eee units * $30 per unit) Cost of goods available for sale Ending inventory (20,208 * $30) Cost of goods sold Gross margin Selling and administrative expenses Net income & 3, eee, eee 3,see, eee 600,000 2,400,000 1,688,888 510, eee $1,290,000 Additional Information a. Selling and administrative expenses consist of $350,000 in annual fixed expenses and $2 per unit in variable seling and administrative expenses. b. The company's product cost of $30 per unit is computed as follows. Direct materials Direct labor Variable overhead Fixed overhead (9788,800 / 180,880 units) $ 4 per unit $15 per unit $ 4 per unit $7 per unit Required: 1. Prepare an Income statement for the company under variable costing. 2. Fill in the blanks Required 1 Required 2 Prepare an income statement for the company under variable costing. TREZ Company Variable Costing Income Statement Sales $ 4,000,000 Less: Variable costs Direct materials Direct labor Variable overhead Variable selling and administrative expenses Contribution margin Fixed overhead Fixed selling and administrative costs Net income (loss) Z'Dowell Company produces a single product. Its Income statements under absorption costing for its first two years of operation follow. Sales ($46 per unit) Cost of goods sold ($31 per unit) Gross margin Selling and administrative expenses Net income 2018 2019 $1,184,80 $2,924,908 744,00 1,364,000 360,888 660,00 288, eee 328,eee $ 72,800 $ 332,000 Additional Information a. Sales and production data for these first two years follow. Units produced Units sold 2018 34,880 24,880 2019 34, eee 44,888 b. Variable cost per unit and total fixed costs are unchanged during 2018 and 2019. The company's $31 per unit product cost consists of the following. $4 Direct materials Direct labor Variable overhead Fixed overhead ($340, 088/34,000 units) Total product cost per unit 8 9 10 $31 C. Selling and administrative expenses consist of the following. Variable selling and administrative expenses ($2 per unit) Fixed selling and administrative expenses Total selling and administrative expenses 2018 2e19 $ 48,990 $ 88,888 240,000 240, eee $288,000 $328, eee 1. Prepare Income statements for the company for each of its first two years under variable costing. (Loss amounts sh with a minus sign.) DOWELL Company Variable Costing Income Statements 2018 2019 Sales Less: Variable costs Direct materials Direct labor Variable overhead Variable selling and administrative expenses Contribution margin Less: Fixed expenses Fixed selling and administrative costs Fixed overhead 2. Prepare a table as in Exhibit 6.12 to convert variable costing income to absorption costing Income for both 2018 and 2019. (L amounts should be entered with a minus sign.) DOWELL COMPANY Reconciliation of variable Costing Income to Absorption Costing Income 2018 2019 Variable costing income (loss) Add: Fixed overhead in ending inventory Less: Fixed overhead in beginning inventory Absorption costing income (loss)