Question
Sweet Acacia Motors is a division of Sweet Acacia Products Corporation. The division manufactures and sells an electric switch used in a wide variety of
Sweet Acacia Motors is a division of Sweet Acacia Products Corporation. The division manufactures and sells an electric switch used in a wide variety of applications. During the coming year, it expects to sell 190,000 units for $8.00 per unit. Michelle Walker is the division manager. She is considering producing either 190,000 or 250,000 units during the period. Other information is as follows:
Division Information for 2022 | ||||
Beginning inventory | 0 | |||
Expected sales in units | 190,000 | |||
Selling price per unit | $8.00 | |||
Variable manufacturing cost per unit | $2.70 | |||
Fixed manufacturing cost (total) | $475,000 | |||
Fixed manufacturing overhead costs per unit | ||||
Based on 190,000 units | $2.50 | per unit ($475,000 190,000) | ||
Based on 250,000 units | $1.90 | per unit ($475,000 250,000) | ||
Manufacturing cost per unit | ||||
Based on 190,000 units | $5.20 | per unit ($2.70 variable + $2.50 fixed) | ||
Based on 250,000 units | $4.60 | per unit ($2.70 variable + $1.90 fixed) | ||
Variable selling and administrative expenses | $0.30 | per unit | ||
Fixed selling and administrative expenses (total) | $11,400 |
(a)
Correct answer icon
Your answer is correct.
Prepare an absorption-costing income statement, with one column showing the results if 190,000 units are produced and one column showing the results if 250,000 units are produced.
b)
Prepare a variable-costing income statement, with one column showing the results if 190,000 units are produced and one column showing the results if 250,000 units are produced.
SWEET ACACIAMOTORS DIVISION Income Statement For the Year Ended 2022 Variable Costing | |||||
---|---|---|---|---|---|
Units produced | 250,000 | 190,000 | |||
Units sold | enter number of units sold | enter number of units sold | |||
select an income statement item Net incomeTotal variable costsFixed selling and administrative expensesVariable cost of goods soldContribution marginFixed manufacturing overheadVariable costsVariable costs of goods available for saleFixed costsVariable selling and administrative expensesSales | $enter a dollar amount | $enter a dollar amount | |||
select between addition and deduction AddLess: select an opening name for section one Fixed costsVariable costsVariable selling and administrative expensesFixed manufacturing overheadNet incomeVariable costs of goods available for saleContribution marginFixed selling and administrative expensesSalesTotal variable costsVariable cost of goods sold | |||||
select an income statement item Total variable costsContribution marginVariable cost of goods soldSalesNet incomeVariable selling and administrative expensesVariable costsFixed costsFixed selling and administrative expensesFixed manufacturing overheadVariable costs of goods available for sale | enter a dollar amount | enter a dollar amount | |||
select an income statement item Variable costs of goods available for saleNet incomeFixed manufacturing overheadTotal variable costsVariable selling and administrative expensesFixed costsFixed selling and administrative expensesSalesVariable costsContribution marginVariable cost of goods sold | enter a dollar amount | enter a dollar amount | |||
select a summarizing line for the first part Fixed selling and administrative expensesTotal variable costsVariable selling and administrative expensesFixed manufacturing overheadVariable cost of goods soldFixed costsSalesNet incomeContribution marginVariable costs of goods available for saleVariable costs | enter a total amount for the first part | enter a total amount for the first part | |||
select between addition and deduction AddLess: select an opening name for section two Fixed costsTotal variable costsNet incomeContribution marginVariable costs of goods available for saleFixed selling and administrative expensesVariable selling and administrative expensesFixed manufacturing overheadVariable cost of goods soldVariable costsSales | |||||
select an income statement item Fixed manufacturing overheadVariable selling and administrative expensesVariable cost of goods soldVariable costs of goods available for saleVariable costsFixed costsContribution marginSalesTotal variable costsNet incomeFixed selling and administrative expenses | enter a dollar amount | enter a dollar amount | |||
select an income statement item Total variable costsVariable cost of goods soldFixed costsSalesFixed manufacturing overheadVariable costs of goods available for saleNet incomeFixed selling and administrative expensesVariable selling and administrative expensesVariable costsContribution margin | enter a dollar amount | enter a dollar amount | |||
select a closing name for this statement Fixed selling and administrative expensesVariable selling and administrative expensesFixed costsSalesNet incomeContribution marginTotal variable costsFixed manufacturing overheadVariable cost of goods soldVariable costsVariable costs of goods available for sale | $enter a total amount for this statement | $enter a total amount for this statement |
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