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Variable and Absorption CostingService Company Tech Helpers Company prepares a variable costing income statement for internal management and an absorption costing income statement for its

Variable and Absorption CostingService Company 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 (annual) $240,000
Marketing, general and administrative
Variable cost (per service contract completed) $5.00
Fixed cost (annual cost) $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

Cost of Goods Sold:
Beginning Inventory Answer

Variable Costs Answer

Fixed Costs Answer

Less: Ending Inventory Answer

Cost of Goods Sold Answer

AnswerContribution marginGross profitLess: Ending inventorySelling expenseOverhead cost

Answer

AnswerContribution marginGross profitLess: Ending inventorySelling expenseOverhead cost

Answer

Administrative expense Answer

Net Income Answer

b. Calculate reported income for the bank. Do not use negative signs with any answers.

Variable Costing Income Statement
Sales Answer

Cost of Goods Sold:
Beginning Inventory Answer

Variable Costs Answer

AnswerContribution marginGross profitLess: Ending inventoryOverhead costVariableselling expense

Answer

Variable cost of goods sold Answer

AnswerContribution marginGross profitLess: Ending inventoryOverhead costVariable selling expense

Answer

AnswerContribution marginGross profitLess: Ending inventoryOverhead costVariableselling expense

Answer

Fixed costs:
AnswerContribution marginGross profitLess: Ending inventoryOverhead costVariableselling expense

Answer

Administrative Expense Answer

Total Fixed Cost Answer

Net Income Answer

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