Question
Tech Helpers Company prepares a variable costing income statement for internal management and an absorption costing income statement for its bank. Tech Helpers provides a
Tech Helpers Company prepares a variable costing income statement for internal management and an absorption costing income statement for its bank. Tech Helpers provides a personal computer maintenance service that is sold for $100. The variable and fixed cost data are as follows:
Direct labor | $25.00 | |||
Overhead | ||||
Variable cost per unit | $5.00 | |||
Fixed cost | $240,000 | |||
Marketing, general and administrative | ||||
Variable cost (per service contract completed) | $5.00 | |||
Fixed cost (per month) | $20,000 |
During 2019, 4,500 service contracts were started and 5,000 service contracts were completed. At the beginning of 2019, Tech Helpers had 500 service contracts in process at a per-unit cost of $90 in beginning work-in-process inventory.
a. Calculate reported income for management. Do not use negative signs with any answers.
Absorption Costing Income Statement | ||||
---|---|---|---|---|
Sales | Answer Correct Mark 1.00 out of 1.00 | |||
Cost of Goods Sold: | ||||
Beginning Inventory | Answer Incorrect Mark 0.00 out of 1.00 | |||
Variable Costs | Answer Incorrect Mark 0.00 out of 1.00 | |||
Fixed Costs | Answer Correct Mark 1.00 out of 1.00 | |||
Less: Ending Inventory | Answer Correct Mark 1.00 out of 1.00 | |||
Cost of Goods Sold | Answer Incorrect Mark 0.00 out of 1.00 | |||
AnswerContribution marginGross profitLess: Ending inventorySelling expenseOverhead cost Correct Mark 1.00 out of 1.00 | Answer Incorrect Mark 0.00 out of 1.00 | |||
AnswerContribution marginGross profitLess: Ending inventorySelling expenseOverhead cost Correct Mark 1.00 out of 1.00 | Answer Incorrect Mark 0.00 out of 1.00 | |||
Administrative expense | Answer Incorrect Mark 0.00 out of 1.00 | |||
Net Income | Answer Incorrect Mark 0.00 out of 1.00 |
b. Calculate reported income for the bank. Do not use negative signs with any answers.
Variable Costing Income Statement | |||||
---|---|---|---|---|---|
Sales |
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