Question

Exercise 19-3 Income reporting under absorption costing and variable costing LO P2 Sims Company, a manufacturer...

Exercise 19-3 Income reporting under absorption costing and variable costing LO P2 Sims Company, a manufacturer of tablet computers, began operations on January 1, 2017. Its cost and sales information for this year follows. Manufacturing costs Direct materials $ 40 per unit Direct labor $ 60 per unit Overhead costs for the year Variable overhead $ 3,000,000 Fixed overhead $ 7,000,000 Selling and administrative costs for the year Variable $ 770,000 Fixed $ 4,250,000 Production and sales for the year Units produced 100,000 units Units sold 70,000 units Sales price per unit $ 350 per unit 1. Prepare an income statement for the year using variable costing. 2. Prepare an income statement for the year using absorption costing. 3. Under what circumstance(s) is reported income identical under both absorption costing and variable costing?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Exercise 6-3 Income reporting under absorption costing and variable costing LO P2 Sims Company, a manufacturer...
Exercise 6-3 Income reporting under absorption costing and variable costing LO P2 Sims Company, a manufacturer of tablet computers, began operations on January 1, 2017. Its cost and sales information for this year follows. Manufacturing costs Direct materials $ 40 per unit Direct labor $ 60 per unit Overhead costs for the year Variable overhead $ 3,000,000 Fixed overhead $ 7,000,000 Selling and administrative costs for the year Variable $ 750,000 Fixed $ 4,750,000 Production and sales for the year...
Exercise 19-7 Income reporting under absorption costing and variable costing LO P2 [The following information applies...
Exercise 19-7 Income reporting under absorption costing and variable costing LO P2 [The following information applies to the questions displayed below.] Oak Mart, a producer of solid oak tables, reports the following data from its second year of business. Sales price per unit $ 310 per unit Units produced this year 100,000 units Units sold this year 104,000 units Units in beginning-year inventory 4,000 units Beginning inventory costs Variable (4,000 units × $140) $ 560,000 Fixed (4,000 units × $75)...
Exercise 19-9  Income statement under absorption costing and variable costing  P1  P2 Cool Sky reports the following costing data...
Exercise 19-9  Income statement under absorption costing and variable costing  P1  P2 Cool Sky reports the following costing data on its product for its first year of operations. During this first year, the company produced 44,000 units and sold 36,000 units at a price of $140 per unit. Manufacturing costs Direct materials per unit $60 Direct labor per unit $22 Variable overhead per unit $8 Fixed overhead for the year $528,000 Selling and administrative costs Variable selling and administrative cost per unit $11...
Problem 06-2A Variable costing income statement and conversion to absorption costing income LO P2, P3 Trez...
Problem 06-2A Variable costing income statement and conversion to absorption costing income LO P2, P3 Trez Company began operations this year. During this first year, the company produced 100,000 units and sold 80,000 units. The absorption costing income statement for this year follows. Sales (80,000 units × $45 per unit) $ 3,600,000 Cost of goods sold Beginning inventory $ 0 Cost of goods manufactured (100,000 units × $25 per unit) 2,500,000 Cost of goods available for sale 2,500,000 Ending inventory...
Problem 06-1A Variable costing income statement and conversion to absorption costing income (two consecutive years) LO...
Problem 06-1A Variable costing income statement and conversion to absorption costing income (two consecutive years) LO P2, P3 [The following information applies to the questions displayed below.] Dowell Company produces a single product. Its income statements under absorption costing for its first two years of operation follow. 2018 2019 Sales ($48 per unit) $ 1,152,000 $ 2,112,000 Cost of goods sold ($33 per unit) 792,000 1,452,000 Gross margin 360,000 660,000 Selling and administrative expenses 282,000 317,000 Net income $ 78,000...
Problem 06-1A Variable costing income statement and conversion to absorption costing income (two consecutive years) LO...
Problem 06-1A Variable costing income statement and conversion to absorption costing income (two consecutive years) LO P2, P3 Dowell Company produces a single product. Its income statements under absorption costing for its first two years of operation follow. 2018 2019 Sales ($48 per unit) $ 1,152,000 $ 2,112,000 Cost of goods sold ($33 per unit) 792,000 1,452,000 Gross margin 360,000 660,000 Selling and administrative expenses 282,000 317,000 Net income $ 78,000 $ 343,000 Additional Information Sales and production data for...
Income Statements under Absorption and Variable Costing Patagucci Inc. manufactures and sells athletic equipment. The company...
Income Statements under Absorption and Variable Costing Patagucci Inc. manufactures and sells athletic equipment. The company began operations on August 1, 2016, and operated at 100% of capacity (38,500 units) during the first month, creating an ending inventory of 3,500 units. During September, the company produced 35,000 garments but sold 38,500 units at $80 per unit. The September manufacturing costs and selling and administrative expenses were as follows: Number of Units Unit Cost Total Cost Manufacturing costs in September beginning...
Income Statements under Absorption and Variable Costing Shawnee Motors Inc. assembles and sells MP3 players. The...
Income Statements under Absorption and Variable Costing Shawnee Motors Inc. assembles and sells MP3 players. The company began operations on August 1 and operated at 100% of capacity during the first month. The following data summarize the results for August: Sales (16,000 units) $2,240,000 Production costs (21,000 units): Direct materials $1,087,800 Direct labor 522,900 Variable factory overhead 260,400 Fixed factory overhead 174,300 2,045,400 Selling and administrative expenses: Variable selling and administrative expenses $317,000 Fixed selling and administrative expenses 122,700 439,700...
Problem 06-1A Variable costing income statement and conversion to absorption costing income (two consecutive years) LO...
Problem 06-1A Variable costing income statement and conversion to absorption costing income (two consecutive years) LO P2, P3 [The following information applies to the questions displayed below.] Dowell Company produces a single product. Its income statements under absorption costing for its first two years of operation follow. 2018 2019 Sales ($46 per unit) $ 920,000 $ 1,840,000 Cost of goods sold ($31 per unit) 620,000 1,240,000 Gross margin 300,000 600,000 Selling and administrative expenses 295,000 345,000 Net income $ 5,000...
Income Statements under Absorption and Variable Costing Shawnee Motors Inc. assembles and sells MP3 players. The...
Income Statements under Absorption and Variable Costing Shawnee Motors Inc. assembles and sells MP3 players. The company began operations on August 1 and operated at 100% of capacity during the first month. The following data summarize the results for August: Sales (17,000 units) $2,210,000 Production costs (22,000 units): Direct materials $1,058,200 Direct labor 508,200 Variable factory overhead 253,000 Fixed factory overhead 169,400 1,988,800 Selling and administrative expenses: Variable selling and administrative expenses $308,300 Fixed selling and administrative expenses 119,300 427,600...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT