Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Trez Company began operations this year. During this first year, the company produced 100,000 units and sold 80,000 units. The absorption costing income statement for

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
Trez Company began operations this year. During this first year, the company produced 100,000 units and sold 80,000 units. The absorption costing income statement for this year follows. Sales (80,000 units * $45 per unit) Cost of goods sold Beginning inventory Cost of goods manufactured (100,000 units * $25 per unit) Cost of goods available for sale Ending inventory (20,000 $25) Cost of goods sold Gross margin Selling and administrative expenses Net income $3,600,000 $ e 2,500,000 2,500,000 500,00 2,000,000 1,600,000 630,000 $ 970,000 Additional Information a. Selling and administrative expenses consist of $450,000 in annual fixed expenses and $2.25 per unit in variable selling and administrative expenses b. The company's product cost of $25 per unit is computed as follows. Direct materials Direct labor Variable overhead Fixed overhead ($700,000 / 100,eee units) $ 3 per unit $12 per unit $ 3 per unit $7 per unit Required: 1. Prepare an income statement for the company under variable costing 2. Fill in the blanks Prepare an income statement for the company under variable costing. TREZ Company Variable Costing Income Statement Net income (loss) Required 1 Required 2 Fill in the blanks. The dollar difference in variable costing income and absorption costing income units fixed overhead per unit.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting The Impact On Decision Makers

Authors: Gary A. Porter, Curtis L. Norton

6th Edition

0324655231, 978-0324655230

More Books

Students also viewed these Accounting questions

Question

Swatting will always result in no criminal charges. True False

Answered: 1 week ago

Question

Describe reviewing applications and rsums.

Answered: 1 week ago

Question

Identify the uses of performance appraisal.

Answered: 1 week ago

Question

Discuss selection in a global environment.

Answered: 1 week ago