### Absorption and Variable Costing Income StatementsDuring the first month of operations ending July 31, YoSan Inc. manufactured 2,400 flat panel televisions, of which 2,000 were sold. The operating data for the month are summarized as follows:#### Sales- **$2,150,000**#### Manufacturing Costs- **Direct materials:** $960,000- **Direct labor:** $420,000- **Variable manufacturing cost:** $156,000- **Fixed manufacturing cost:** $288,000 **Total Manufacturing Costs:** $1,824,000#### Selling and Administrative Expenses- **Variable:** $204,000- **Fixed:** $96,000 **Total Selling and Administrative Expenses:** $300,000### Required1. **Prepare an income statement based on the absorption costing concept.** #### YoSan Inc. **Absorption Costing Income Statement For the Month Ended July 31** - Cost of Goods Sold: - [Various Entries and Calculations]2. **Prepare an income statement based on the variable costing concept.** #### YoSan Inc. **Variable Costing Income Statement For the Month Ended July 31** - [Various Entries and Calculations]Note: The sections under income statements require detailed calculations and itemized entries which are outlined for students or professionals to fill in as part of an exercise in understanding cost accounting methods. **Educational Website Text:**### Preparing an Income Statement Using Variable Costing**YoSan Inc. Variable Costing Income Statement For the Month Ended July 31**- **Variable cost of goods sold:** - [Dropdown] - [Textbox] - [Dropdown] - [Textbox] - [Dropdown] - [Textbox]- **Fixed costs:** - [Textbox] - [Dropdown] - [Textbox]---### Explanation Section:**3. Difference in Operating Income:**The operating income reported under [Dropdown] costing exceeds the operating income reported under [Dropdown] costing, due to [Dropdown] manufacturing costs that are deferred to a future month under [Dropdown] costing.---**Explanation for Using Variable Costing:**Variable costing is a managerial accounting tool that includes only variable production costs — direct materials, direct labor, and variable manufacturing overhead — in the cost of a unit of product. Fixed manufacturing costs are expensed in the period in which they are incurred.In this exercise, you can select and fill in the values using dropdowns and textboxes which represent different elements of the income statement. Understanding how costs behave differently under variable costing can provide insights into how production impacts profitability and financial reporting.

As per the absorption costing method, the product cost includes fixed and variable manufacturing…

Answered: Absorption and Variable Costing Income…

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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Subject: accounting
Denton Company manufactures and sells a single product. Cost data for the product are given: Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Total variable cost per unit Fixed costs per month: Fixed manufacturing overhead Fixed selling and administrative Total fixed cost per month July August The product sells for $48 per unit. Production and sales data for July and August, the first two months of operations, follow: Units Produced 27,000 27,000 Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income $ 108,000 172,000 $ 280,000 Required: 1. Determine the unit product cost under: a. Absorption costing. b. Variable costing. $ 5 11 3 2 $ 21 Units Sold 23,000 31,000 The company's Accounting Department has prepared the following absorption costing income statements for July and August: July August $ 1,104,000 $ 1,488,000 529,000 575,000 218,000 $ 357,000 713,000 775,000 234,000…
Variable Costing Income Statement On July 31, the end of the first month of operations, Rhys Company prepared the following income statement, based on the absorption costing concept: Sales (96,000 units) $4,440,000 Cost of goods sold: Cost of goods manufactured $3,120,000 Less ending inventory (24,000 units) 624,000 Cost of goods sold 2,496,000 Gross profit $1,944,000 Selling and administrative expenses 288,000 Income from operations $1,656,000 a. Prepare a variable costing income statement, assuming that the fixed manufacturing costs were $132,000 and the variable selling and administrative expenses were $115,200. In your computations, round unit costs to two decimal places and round final answers to the nearest dollar. Rhys CompanyIncome Statement-Variable CostingFor the Month Ended July 31 $- Select - Variable cost of goods sold: $- Select - - Select - - Select - $- Select -…
Subject: Cost Management & accounting MCQ'S: Columbia Corporation produces a single product. The company's variable costing income statement for November appears below: Columbia Corporation Income Statement For the Month ended November 30 Sales ($30 per unit) $ 1,200,000 Variable expenses: Variable cost of goods sold 720,000 Variable selling expense 160,000 Total variable expenses 880,000 Contribution margin 320,000 Fixed expenses: Manufacturing 140,000 Selling and administrative 35,000 Total fixed expenses 175,000 Net operating income $ 145,000 During November, 35,000 units were manufactured and 8,000 units were in beginning inventory. Variable production costs have remained constant on a per unit basis over the past several months. The value of the company's…
Variable Costing Lindquist Company has the following information for February: Sales $690,000 Variable cost of goods sold 324,300 Fixed manufacturing costs 117,300 Variable selling and administrative expenses 62,100 Fixed selling and administrative expenses 41,400 Determine the following for Lindquist Company for the month of February: a. Manufacturing margin b. Contribution margin c. Operating income 365,700
Variable Costing Marley Company has the following information for March: Sales $912,000 Variable cost of goods sold 474,000 Fixed manufacturing costs 82,000 Variable selling and administrative expenses 238,100 Fixed selling and administrative expenses 54,700 Determine the following for Marley Company for the month of March: a. Manufacturing margin b. Contribution margin c. Operating income $
Income statements under absorption and variable costing Gallatin County Motors Inc. assembles and sells snowmobile engines. The company began operations on July 1 and operated at 100% of capacity during the first month. The following data summarize the results for July: Sales (3,500 units) $2,345,000 Production costs (4,000 units): Direct materials $1,152,400 Direct labor 495,600 Variable factory overhead 80,800 Fixed factory overhead 126,800 1,855,600 Selling and administrative expenses: Variable selling and administrative expenses $57,500 Fixed selling and administrative expenses 24,100 81,600 This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. Open spreadsheet a. Prepare an income statement according to the absorption costing concept. Gallatin County Motors Inc. Absorption Costing Income…
A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations: Selling price Units in beginning inventory Units produced Units sold Units in ending inventory Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative expense Fixed costs: Fixed manufacturing overhead Fixed selling and administrative expense What is the total period cost for the month under absorption costing? $ 133 0 7,000 6,800 200 $ 41 $ 57 $ 5 $4 $133,000 $ 34,000

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