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
|Sales (80,000 units × $45 per unit)||$||3,600,000|
|Cost of goods sold|
|Cost of goods manufactured (100,000 units × $25 per unit)||2,500,000|
|Cost of goods available for sale||2,500,000|
|Ending inventory (20,000 × $25)||500,000|
|Cost of goods sold||2,000,000|
|Selling and administrative expenses||530,000|
|Direct materials||$||4||per unit|
|Direct labor||$||10||per unit|
|Variable overhead||$||3||per unit|
|Fixed overhead ($800,000 / 100,000 units)||$||8||per unit|
1. Prepare an income statement for the company under variable costing.
2. Fill in the blanks.
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