Absorption and Variable Costing Income Statements During the first month of operations ended July 31, YoSan Inc. manufactured 9,600 flat panel televisions, of which 8,800 were sold. Operating data for the month are summarized as follows: Sales $1,320,000 Manufacturing costs: Direct materials $681,600 Direct labor 201,600 Variable manufacturing cost 172,800 Fixed manufacturing cost 86,400 1,142,400 Selling and administrative expenses: Variable $105,600 Fixed 48,600 154,200 Required: Question Content Area 1. Prepare an income statement based on the absorption costing concept. YoSan Inc.Absorption Costing Income StatementFor the Month Ended July 31 $- Select - Cost of goods sold: $- Select - - Select - - Select - $- Select - - Select - $- Select - Question Content Area 2. Prepare an income statement based on the variable costing concept. YoSan Inc.Variable Costing Income StatementFor the Month Ended July 31 $- Select - Variable cost of goods sold: $- Select - - Select - - Select - $- Select - - Select - $- Select - Fixed costs: $- Select - - Select - blank blank - Select - $- Select - Question Content Area 3. Explain the reason for the difference in the amount of operating income reported in (1) and (2). The operating income reported under costing exceeds the operating income reported under costing, due to manufacturing costs that are deferred to a future month under costing.
Absorption and Variable Costing Income Statements During the first month of operations ended July 31, YoSan Inc. manufactured 9,600 flat panel televisions, of which 8,800 were sold. Operating data for the month are summarized as follows: Sales $1,320,000 Manufacturing costs: Direct materials $681,600 Direct labor 201,600 Variable manufacturing cost 172,800 Fixed manufacturing cost 86,400 1,142,400 Selling and administrative expenses: Variable $105,600 Fixed 48,600 154,200 Required: Question Content Area 1. Prepare an income statement based on the absorption costing concept. YoSan Inc.Absorption Costing Income StatementFor the Month Ended July 31 $- Select - Cost of goods sold: $- Select - - Select - - Select - $- Select - - Select - $- Select - Question Content Area 2. Prepare an income statement based on the variable costing concept. YoSan Inc.Variable Costing Income StatementFor the Month Ended July 31 $- Select - Variable cost of goods sold: $- Select - - Select - - Select - $- Select - - Select - $- Select - Fixed costs: $- Select - - Select - blank blank - Select - $- Select - Question Content Area 3. Explain the reason for the difference in the amount of operating income reported in (1) and (2). The operating income reported under costing exceeds the operating income reported under costing, due to manufacturing costs that are deferred to a future month under costing.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Absorption and Variable Costing Income Statements
During the first month of operations ended July 31, YoSan Inc. manufactured 9,600 flat panel televisions, of which 8,800 were sold. Operating data for the month are summarized as follows:
| Sales | $1,320,000 | |
| Direct materials | $681,600 | |
| Direct labor | 201,600 | |
| Variable manufacturing cost | 172,800 | |
| Fixed manufacturing cost | 86,400 | 1,142,400 |
| Selling and administrative expenses: | ||
| Variable | $105,600 | |
| Fixed | 48,600 | 154,200 |
Required:
Question Content Area
1. Prepare an income statement based on the absorption costing concept.
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$- Select - | |
| Cost of goods sold: | ||
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$- Select - | |
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- Select - | |
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- Select - | |
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$- Select - | |
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$- Select - |
Question Content Area
2. Prepare an income statement based on the variable costing concept.
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$- Select - | |
| Variable cost of goods sold: | ||
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$- Select - | |
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- Select - | |
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- Select - | |
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$- Select - | |
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- Select - | |
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$- Select - | |
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$- Select - | |
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- Select - | blank |
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blank | - Select - |
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Question Content Area
3. Explain the reason for the difference in the amount of operating income reported in (1) and (2).
The operating income reported underExpert Solution
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