Question 3

Asian Windows manufactures a hand-painted bamboo window shade for standard-size windows. Production and sales data for 2020 are as follows:

Variable manufacturing costs		$41	per shade
Fixed manufacturing costs		$114,400
Variable selling and administrative expenses		$9	per shade
Fixed selling and administrative expenses		$250,600
Selling price		$93	per shade
Units produced		10,400	shades
Units sold		8,450	shades

(a) Prepare an income statement using absorption costing.

Asian Windows manufactures a hand-painted bamboo window shade for standard-size windows. Production and sales data for 2020 are as follows: Variable manufacturing costs Fixed manufacturing costs Variable selling and administrative expenses Fixed selling and administrative expenses Selling price Units produced Units sold $41 per shade $114,400 $9 per shade $250,600 $93 per shade 10,400 shades 8,450 shades Prepare an income statement using absorption costing. ASIAN WINDOWS Income Statement For the Year Ended December 31, 2020 Absorption Costing Sales Less. Cost of goods sold Gross profit Add Cost of goods manufactured Variable $ Fixed Net income