Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Variable Costing Income Statement On April 30, the end of the first month of operations, Joplin Company prepared the following income statement, based on the

Variable Costing Income Statement

On April 30, the end of the first month of operations, Joplin Company prepared the following income statement, based on the absorption costing concept:

Joplin Company Absorption Costing Income Statement For the Month Ended April 30
Sales (6,000 units) $120,000
Cost of goods sold:
Cost of goods manufactured (7,000 units) $98,000
Inventory, April 30 (1,000 units) (14,000)
Total cost of goods sold (84,000)
Gross profit $36,000
Selling and administrative expenses (19,970)
Operating income $16,030

If the fixed manufacturing costs were $20,580 and the fixed selling and administrative expenses were $9,780, prepare an income statement according to the variable costing concept. Round all final answers to whole dollars.

Contribution marginInventoryManufacturing marginSalesVariable cost of goods manufacturedVariable selling and administrative expensesSales $Sales
Variable cost of goods sold:
Contribution marginFixed manufacturing costsVariable cost of goods manufacturedVariable cost of goods soldVariable selling and administrative expensesVariable cost of goods manufactured $Variable cost of goods manufactured
Fixed manufacturing costsInventory, April 30Fixed selling and administrative expensesManufacturing marginSalesInventory, April 30

Inventory, April 30

InventorySalesTotal variable cost of goods manufacturedTotal variable cost of goods soldTotal variable selling and administrative expensesTotal variable cost of goods sold

Total variable cost of goods sold

Contribution marginFixed manufacturing costsInventoryManufacturing marginSalesManufacturing margin $Manufacturing margin
Manufacturing marginSalesVariable cost of goods manufacturedVariable cost of goods soldVariable selling and administrative expensesVariable selling and administrative expenses

Variable selling and administrative expenses

Contribution marginFixed selling and administrative expensesInventoryManufacturing marginSalesContribution margin $Contribution margin
Fixed costs:
Fixed manufacturing costsFixed inventoryVariable cost of goods manufacturedVariable cost of goods soldVariable selling and administrative expensesFixed manufacturing costs $Fixed manufacturing costs
Fixed selling and administrative expensesFixed inventoryFixed salesVariable cost of goods soldVariable selling and administrative expensesFixed selling and administrative expenses

Fixed selling and administrative expenses

Contribution marginOperating incomeManufacturing marginSalesTotal fixed costsTotal fixed costs

Total fixed costs

Operating incomeLoss from operationsOperating income $Operating income

Feedback

Sales - (Variable Cost of Goods Manufactured* - Variable Costing Ending inventory**) = Manufacturing Margin; Manufacturing Margin - Variable Selling and Administrative Expenses = Contribution Margin; Contribution Margin - (Fixed Manufacturing Costs + Fixed Selling and Administrative Expenses) = Operating income

*Variable Cost of Goods Manufactured = Total Cost of Goods Manufactured - Fixed Manufacturing Cost

**Variable Costing Ending Inventory = (Variable Cost of Goods Manufactured/Total Un

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

Intermediate Accounting Volume 2

Authors: Thomas Beechy, Joan Conrod, Elizabeth Farrell, Ingrid McLeod-Dick

6th Edition

1259105482, 9780071338820

More Books

Students also viewed these Accounting questions

Question

1. Pupils can be trusted to work together without supervision.

Answered: 1 week ago