QUESTION 5 Partially correctPoints out of 20 00 Flag question Question text Absorption and Variable Costing Comparisons Sales Exceed Production Wright Development purchases, develops, and sells commercial building sites As the sites are sold, they are cleared at an average cost of $2,000 per site Storm drains and driveways are also installed at an average cost of $5,500 per site Selling costs are 10 percent of sales price Administrative costs are $415,000 per year During 2016, the company bought 1,000 acres of land for $5,000,000 and divided it into 200 sites of equal size The average selling price per site was $80,000 during 2016 when 50 sites were sold During 2017, the company purchased and developed another 1,000 acres, divided into 200 sites The purchase price was again $5,000,000 Sales totaled 300 sites in 2017 at an average price of $80,000 Required a Prepare 2016 and 2017 functional income statements using absorption costing Use a negative sign only to indicate a net loss for income Otherwise, do not use negative signs with your answers Wright Development Functional Income Statements For the Years 2016 and 2017 2016 2017 Sales $ Answer 4,000,000 $ Answer 24,000,000 Cost of sales Answer 1,625,000 Answer 9,750,000 Gross profit Answer 2,375,000 Answer 14,250,000 Selling and administrative expenses Answer 815,000 Answer 815,000 Net income (loss) $ Answer 1,560,000 $ Answer 13,435,000 b Prepare 2016 and 2017 contribution income statements using variable costing Use a negative sign only to indicate a net loss for income Otherwise, do not use negative signs with your answers Wright Development Contribution Income Statements For the Years 2016 and 2017 2016 2017 Sales $ Answer 4,000,000 $ Answer 24,000,000 Variable costs Answer 775,000 Answer 4,950,000 Contribution margin Answer 3,225,000 Answer 19,050,000 Fixed expenses Answer 5,415,000 Answer 5,415,000 Net income (loss) $ Answer (2,190,000) $ Answer 13,635,000 QUESTION5 Partially correct Points out of 20 00 Flag question Absorption and Variable Costing Comparisons Sales Exceed Production Wright Development purchases, develops, and sells commercial building sites As the sites are sold, they are cleared at an average cost of $2,000 per site Storm drains and driveways are also installed at an average cost of $5,500 per site Selling costs are 10 percent of sales price Administrative costs are $415,000 per year During 2016, the company bought 1,000 acres of land for $5,000,000 and divided it Into 200 sites of equal size The average selling price per site was $80,000 during 2016 when 50 sites were sold During 2017, the company purchased and developed another 1,000 acres, divided into 200 sites The purchase price was again $5,000,000 Sales totaled 300 sites in 2017 at an average price of $80,000 Required a Prepare 2016 and 2017 functional income statements using absorption costing Use a negative sign only to indicate a net loss for income Otherwise, do not use negative signs with your answers Wright Development Functional Income Statements For the Years 2016 and 2017 2016 2017 Sales 4,000,0 $24,000, Cost of sales 1,625,0 9,750,0 Gross profit 2,375,0 14,250, Selling and administrative expenses 815,000 815,000 Net income (loss) $1,560,0 13,435, b Prepare 2016 and 2017 contribution income statements using variable costing Use a negative sign only to indicate a net loss for Income Otherwise, do not use negatlve signs with your answers Wright Development Contribution Income Statements For the Years 2016 and 2017 2016 2017 Sales $4,000,0 24,000, Variable costs 775,004,950,0 19,050, Contribution margin 3,225,0 19 Fixed expenses Net income (oss (2,190, 13,635, 415,05,415,0

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QUESTION 5 Partially correctPoints out of 20.00 Flag question Question text Absorption and Variable Costing Comparisons: Sales Exceed Production Wright Development purchases, develops, and sells

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QUESTION 5Partially correctPoints out of 20.00 Flag question

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Absorption and Variable Costing Comparisons: Sales Exceed Production

Wright Development purchases, develops, and sells commercial building sites. As the sites are sold, they are cleared at an average cost of $2,000 per site. Storm drains and driveways are also installed at an average cost of $5,500 per site. Selling costs are 10 percent of sales price. Administrative costs are $415,000 per year. During 2016, the company bought 1,000 acres of land for $5,000,000 and divided it into 200 sites of equal size. The average selling price per site was $80,000 during 2016 when 50 sites were sold. During 2017, the company purchased and developed another 1,000 acres, divided into 200 sites. The purchase price was again $5,000,000. Sales totaled 300 sites in 2017 at an average price of $80,000.

Required a. Prepare 2016 and 2017 functional income statements using absorption costing.

Use a negative sign only to indicate a net loss for income. Otherwise, do not use negative signs with your answers.

Wright Development
Functional Income Statements
For the Years 2016 and 2017
	2016	2017
Sales	$ Answer 4,000,000	$ Answer 24,000,000
Cost of sales	Answer 1,625,000	Answer 9,750,000
Gross profit	Answer 2,375,000	Answer 14,250,000
Selling and administrative expenses:	Answer 815,000	Answer 815,000
Net income (loss)	$ Answer 1,560,000	$ Answer 13,435,000

b. Prepare 2016 and 2017 contribution income statements using variable costing.

Use a negative sign only to indicate a net loss for income. Otherwise, do not use negative signs with your answers.

Wright Development
Contribution Income Statements
For the Years 2016 and 2017
	2016	2017
Sales	$ Answer 4,000,000	$ Answer 24,000,000
Variable costs	Answer 775,000	Answer 4,950,000
Contribution margin	Answer 3,225,000	Answer 19,050,000
Fixed expenses	Answer 5,415,000	Answer 5,415,000
Net income (loss)	$ Answer (2,190,000)	$ Answer 13,635,000

QUESTION5 Partially correct Points out of 20.00 Flag question Absorption and Variable Costing Comparisons: Sales Exceed Production Wright Development purchases, develops, and sells commercial building sites. As the sites are sold, they are cleared at an average cost of $2,000 per site. Storm drains and driveways are also installed at an average cost of $5,500 per site. Selling costs are 10 percent of sales price. Administrative costs are $415,000 per year. During 2016, the company bought 1,000 acres of land for $5,000,000 and divided it Into 200 sites of equal size. The average selling price per site was $80,000 during 2016 when 50 sites were sold. During 2017, the company purchased and developed another 1,000 acres, divided into 200 sites. The purchase price was again $5,000,000. Sales totaled 300 sites in 2017 at an average price of $80,000 Required a. Prepare 2016 and 2017 functional income statements using absorption costing. Use a negative sign only to indicate a net loss for income. Otherwise, do not use negative signs with your answers. Wright Development Functional Income Statements For the Years 2016 and 2017 2016 2017 Sales 4,000,0 $24,000, Cost of sales 1,625,0 9,750,0 Gross profit 2,375,0 14,250, Selling and administrative expenses: 815,000 815,000 Net income (loss) $1,560,0 13,435, b. Prepare 2016 and 2017 contribution income statements using variable costing Use a negative sign only to indicate a net loss for Income. Otherwise, do not use negatlve signs with your answers. Wright Development Contribution Income Statements For the Years 2016 and 2017 2016 2017 Sales $4,000,0 24,000, Variable costs 775,004,950,0 19,050, Contribution margin 3,225,0 19 Fixed expenses Net income (oss (2,190, 13,635, 415,05,415,0