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Santana Rey expects sales of Business Solutions's line of computer workstation furniture to equal 300 workstations (at a sales price of $3.700 each) for 2019.
Santana Rey expects sales of Business Solutions's line of computer workstation furniture to equal 300 workstations (at a sales price of $3.700 each) for 2019. The workstations' manufacturing costs include the following Direct materials Direct labor $ 700 per unit $ 320 per unit Variable overbead i $ 100 per unit Fixed overhead $19,200 per year The selling expenses related to these workstations follow Variable selling expenses Fixed selling expenses $35 per unit $3,300 per year Santana is considering how many workstations to produce in 2019. She is confident that she will be able to sell any workstations in her 2019 ending inventory during 2020. However, Santana does not want to overproduce as she does not have sufficient storage space for many more workstations. Cost of goods sold: Direct materials per unit Direct labor per unit Variable overhead per unit Fixed overhead per unit Cost of goods sold per unit Number of workstations sold Production volume 300 workstations 320 workstations $ 700 $ 700 320 320 100 100 $ LA 1,120 $ 1,120 $ 336,000 Total cost of goods sold BUSINESS SOLUTIONS Absorption Costing Income Statements Production volume Sales volume - 300 Workstations 300 workstations 320 workstations Sales Cost of goods sold Gross margin Selling general and administrative expenses Net income (loss) $ Under absorption costing, can the difference between production volume and sales volume affect the reported net income (loss)? 0 0 0 $ 0 C Sales BUSINESS SOLUTIONS Variable Costing Income Statements Production volume (units) Sales volume (units) 300 workstations 320 workstations 300 workstations 300 workstations Less: Variable costs Direct materials Direct labor Variable overhead Variable selling expenses Contribution margin Less: Fixed expenses Fixed overhead costs Fixed selling expenses Net income (loss) Under variable costing, can a company increase its net income by increasing production? 0 0 $ 0 $ 0
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