Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Year 1 Year 2 Sales (@61 per unit) $1,037,000 $1,647,000 Cost of Goods Sold (@$37 per unit) 629,000 999,000 Gross Margin 408,000 648,000 Selling &
Year 1 | Year 2 | |||
Sales (@61 per unit) | $1,037,000 | $1,647,000 | ||
Cost of Goods Sold (@$37 per unit) | 629,000 | 999,000 | ||
Gross Margin | 408,000 | 648,000 | ||
Selling & Admin. Expenses | 289,000 | 319,000 | ||
Net operating income | 119,000 | 329,000 |
$3 per unit variable; $238,000 fixed each year. |
The companys $37 unit product cost is computed as follows
Forty percent of fixed manufacturing overhead consists of wages and salaries; the remainder consists of depreciation charges on production equipment and buildings.
|
1.Prepare a variable costing contribution format income statement for each year.
2. | Reconcile the absorption costing and the variable costing net operating income figures for each year. (Losses and deductions should be indicated with a minus sign.) |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started