Variable Costing Income StatementOn July 31, the end of the first month of operations, Rhys Company prepared the following income statement, based on the absorption costing concept:Sales (25,000 units)$1,700,000Cost of goods sold:Cost of goods manufactured$1,312,500Less ending inventory (5,000 units)218,750Cost of goods sold1,093,750Gross profit$606,250Selling and administrative expenses141,000Income from operations$465,250a. Prepare a variable costing income statement, assuming that the fixed manufacturing costs were $90,000 and the variable selling and administrative expenses were $64,000. In your computations, round unitcosts to two decimal places and round final answers to the nearest dollar.Rhys CompanyIncome Statement-Variable CostingFor the Month Ended July 31Sales1,700,000Variable cost of goods sold:Variable cost of goods manufacturedLess ending inventoryVariable cost of goods soldManufacturing marginVariable selling and administrative expensesContribution marginFixed costs:Fixed manufacturing costsFixed selling and administrative expensesIncome from operations b. Reconcile the absorption costing income from operations of $465,250 with the variable costing income from operations determined in (a).Reconciliation of Absorption and Variable CostingIncomeAbsorption costing income from operations $Variable costing income from operationsDifference

Name: Variable Costing Income StatementOn July 31, the end of the first mon
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Description: Variable Costing Income StatementOn July 31, the end of the first month of operations, Rhys Company prepared the following income statement, based on the absorption costing concept:Sales (25,000 units)$1,700,000Cost of goods sold:Cost of goods manuf

1. Closing stock in Variable Costing is calculated on the basis of Variable manufacturing cost only.…

Business

Accounting

a. Prepare a variable costing income statement, assuming that the fixed manufacturing costs were $90,000 and the variable selling and administrative expenses were $64,000. In your computations, round unit costs to two decimal places and round final answers to the nearest dollar.

a. Prepare a variable costing income statement, assuming that the fixed manufacturing costs were $90,000 and the variable selling and administrative expenses were $64,000. In your computations, round unit costs to two decimal places and round final answers to the nearest dollar.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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