Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

On December 31, the end of the first year of operations, Frankenreiter Inc., manufactured 6,000 units and sold 5,200 units. The following income statement was

On December 31, the end of the first year of operations, Frankenreiter Inc., manufactured 6,000 units and sold 5,200 units. The following income statement was prepared, based on the variable costing concept:

Frankenreiter Inc. Variable Costing Income Statement For the Year Ended December 31, 20Y1
Sales $2,028,000
Variable cost of goods sold:
Variable cost of goods manufactured $1,122,000
EInventory, December 31 (149,600)
Total variable cost of goods sold 972,400
Manufacturing margin $1,055,600
Total variable selling and administrative expenses 244,400
Contribution margin $811,200
Fixed costs:
Fixed manufacturing costs $516,000
Fixed selling and administrative expenses 161,200
Total fixed costs 677,200
Income from operations $134,000

Determine the unit cost of goods manufactured, based on (a) the variable costing concept and (b) the absorption costing concept.

Variable costing $
Absorption costing $

On March 31, the end of the first month of operations, Sullivan Equipment Company prepared the following income statement, based on the variable costing concept:

Sullivan Equipment Company Variable Costing Income Statement For the Month Ended March 31
Sales (11,700 units) $514,800
Variable cost of goods sold:
Variable cost of goods manufactured $243,000
Inventory, March 31 (1,800 units) (32,400)
Total variable cost of goods sold 210,600
Manufacturing margin $304,200
Variable selling and administrative expenses 128,700
Contribution margin $175,500
Fixed costs:
Fixed manufacturing costs $54,000
Fixed selling and administrative expenses 35,100
Total fixed costs 89,100
Income from operations $86,400

Prepare an income statement under absorption costing. Round all final answers to whole dollars.

Sullivan Equipment Company
Absorption Costing Income Statement
For the Month Ended March 31
$
Cost of goods sold:
$
$
$

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored 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

A Textbook Of Cost And Management Accounting

Authors: Arora

10th Edition

9789325956209

More Books

Students also viewed these Accounting questions