Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

On July 31, the end of the first month of operations, Rhys Company prepared the following income statement, based on theabsorption costingconcept: Sales (96,000 units)$4,440,000Cost

On July 31, the end of the first month of operations, Rhys Company prepared the following income statement, based on theabsorption costingconcept:

Sales (96,000 units)$4,440,000Cost of goods sold:Cost of goods manufactured$3,120,000Less ending inventory (24,000 units)624,000Cost of goods sold2,496,000Gross profit$1,944,000Selling and administrative expenses288,000Income from operations$1,656,000

a. variable costing income statement, assuming that the fixed manufacturing costs were $132,000 and the variable selling and administrative expenses were $115,200. In your computations, round unit costs to two decimal places and round final answers to the nearest dollar.

Rhys CompanyIncome Statement-Variable CostingFor the Month Ended July 31Sales

$Variable cost of goods sold:Variable cost of goods manufactured

$Less ending inventory

Variable cost of goods sold

Manufacturing margin

$Variable selling and administrative expenses

Contribution margin

$Fixed costs:Fixed manufacturing costs

$Fixed selling and administrative expenses

Income from operations$

b.Reconcile the absorption costing income from operations of $1,656,000 with the variable costing income from operations determined in (a).

Reconciliation of Absorption and Variable Costing IncomeAbsorption costing income from operations$Variable costing income from operationsDifference$

Feedback

b. How is factory overhead reported in each of the two income statements?

Feedback

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

Comprehensive Assurance & Systems Tool

Authors: Laura IngrahamJ Jenkins

2nd Edition

0131377213, 9780131377219

More Books

Students also viewed these Accounting questions

Question

Cite the characteristics of satisfying intimate relationships.

Answered: 1 week ago

Question

3. Im trying to point out what we need to do to make this happen

Answered: 1 week ago