Using the absorption costing concept, prepare income statements for (a) May and (b) June??
Using the variable costing concept, prepare income statements for (a) May and (b) June??
3a. Explain the reason for the differences in operating income in (1) and (2) for May??
3b.Explain the reason for the differences in operating income in (1) and (2) for June??
Based on your answers to (1) and (2), did Big Sky Creations Company operate more profitably in May or in June??
Explain.* Be sure to complete the statement heading. Refer to the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. A colon (:) will automatically appear if it is required. Enter amounts as positive numbers unless the amount is a calculation that results in a negative amount. For example: Net loss should be negative
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2:32 1 v2.cengagenow.com Chapter 21 Absorption and variable costing income statements for two months and analysis Instructions Labels and Amount Descriptions Instructions During the first month of operations ended May 31, Big Sky Creations Company produced 55,000 designer cowboy boots, of which 51,150 were sold. Operating data for the month are summarized as follows: 1 Sales $895,125.00 2 Manufacturing costs: 3 Direct materials $401,500.00 Direct labor 137,500.00 Variable manufacturing cost 60,500.00 Fixed manufacturing cost 55,000.00 654,500.00 7 Selling and administrative expenses: 8 Variable $40,920.00 9 Fixed 25,575.00 66,495.00 During June, Big Sky Creations produced 47,300 designer cowboy boots and sold 51,150 cowboy boots. Operating data for June are summarized as follows: 1 Sales $895,125.00 2 Manufacturing costs: 3 Direct materials $345,290.00 Direct labor 118,250.00 5 Variable manufacturing cost $2,030.00 Fixed manufacturing cost 55,000.00 570,570.00 Selling and administrative expenses: 8 Variable $40,920.00 9 Fixed 25,575.00 66,495.00 Required: 1. Using the absorption costing concept, prepare income statements for (a) May and (b) June.* 2. Using the variable costing concept, prepare income statements for (a) May and (b) June. . 3a. Explain the reason for the differences in operating income in (1) and (2) for May. 3b. Explain the reason for the differences in operating income in (1) and (2) for June. 4. Based on your answers to (1) and (2), did Big Sky Creations Company operate more profitably in May or in June? Explain. Be sure to complete the statement heading. Refer to the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. A colon (:) will automatically appear if it is required. Enter amounts as positive numbers unless the amount is a calculation that results in a negative amount. For example: Net loss should be negative. + 2 . . .2:34 1 v2.cengagenow.com Chapter 21 Absorption and variable costing income statements for two months and ana Instructions Labels and Amount Descriptions Labels and Amount Descriptions Labels June 30 Cost of goods sold Fixed costs For the Month Ended June 30 For the Month Ended May 31 May 31 Variable cost of goods sold Amount Descriptions Contribution margin Contribution margin ratio Cost of goods manufactured Fixed manufacturing costs Fixed selling and administrative expenses Gross profit Operating income Inventory, June 1 Inventory, May 31 Operating loss Manufacturing margin Planned contribution margin Sales Sales mix Selling and administrative expenses Total cost of goods sold Total fixed costs Total variable cost of goods sold Variable cost of goods manufactured Variable selling and administrative expenses + 3
