Question
The following information is taken from the records of ZM Company for the year ending December 31 2021. There was no beginning or ending inventories.
The following information is taken from the records of ZM Company for the year ending December 31 2021. There was no beginning or ending inventories.
|
| RMB 000 |
| RMB 000 |
| Sales |
100,000.00 | Factory supervisors salary |
500.00 |
| Sales commissions |
1,000.00 | Direct material |
6,000.00 |
| Advertising |
14,000.00 | Direct labor |
6,000.00 |
| Shipping expenses |
7,000.00 | Machine maintenance |
1,000.00 |
| CEO/CFO salaries |
30,000.00 | Indirect labor |
1,000.00 |
| Fire insurance on factory equipment |
3,000.00 | Factory equipment depreciation |
1,500.00 |
| Property taxes on office building |
2,000.00 | Factory rental |
5,000.00 |
Required
- Prepare a contribution income statement and an absorption income statement.
- Suppose that all variable cost fluctuate directly in proportion to sales volume, discuss which income statement would be more helpful for you to prepare a quotation to your client?
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Introduction To Financial Accounting
Authors: Anne Marie Ward, Andrew Thomas
7th edition
77138449, 978-0077132682, 77132688, 978-0077138448
