Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Whitman Company Income Statement Sales (42,000 units x $41.60 per unit) Cost of goods sold (42,000 units x $21 per unit) Gross margin Selling


 

Whitman Company Income Statement Sales (42,000 units x $41.60 per unit) Cost of goods sold (42,000 units x $21 per unit) Gross margin Selling and administrative expenses Net operating income $ 1,747,200 882,000 865,200 525,000 $ 340,200 The company's selling and administrative expenses consist of $315,000 per year in fixed expenses and $5 per unit sold in variable expenses. The $21 unit product cost given above is computed as follows: Direct materials $ 9 Direct labor 3 Variable manufacturing overhead 4 Fixed manufacturing overhead ($245,000 49,000 units) Absorption costing unit product cost 5 $ 21 Required: 1. Redo the company's income statement in the contribution format using variable costing. 2. Reconcile any difference between the net operating income on your variable costing income statement and the net operating income on the absorption costing income statement above.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

1 Income Statement in Contribution Format Variable Costing Sales Variable Cost of Goods Sold Amount ... 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

Managerial Accounting

Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer

13th Edition

978-0073379616, 73379611, 978-0697789938

More Books

Students also viewed these Accounting questions