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Aces Inc., a manufacturer of tennis rackets, began operations this year. The company produced 6,000 rackets and sold 4,900. Each racket was sold at a price of $90. Fixed overhead costs are $78,000, and fixed selling and administrative costs are $65,200. The company also reports the following per unit variable costs for the year: Variable product costs Variable selling and administrative expenses $25.00 $ 2.00 Prepare an income statement under absorption costing. ACES INC. Absorption Costing Income Statement Sales 24 441,000 Less: Cost of goods sold Variable production costs 122,500 Fixed overhead costs Cost of goods sold Gross margin 122,500 Selling general and administrative expenses

Aces Inc., a manufacturer of tennis rackets, began operations this year. The company produced 6,000 rackets and sold 4,900. Each racket was sold at a price of $90. Fixed overhead costs are $78,000, and fixed selling and administrative costs are $65,200. The company also reports the following per unit variable costs for the year: Variable product costs Variable selling and administrative expenses $25.00 $ 2.00 Prepare an income statement under absorption costing. ACES INC. Absorption Costing Income Statement Sales 24 441,000 Less: Cost of goods sold Variable production costs 122,500 Fixed overhead costs Cost of goods sold Gross margin 122,500 Selling general and administrative expenses

FINANCIAL ACCOUNTING
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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Aces Inc., a manufacturer of tennis rackets, began operations this year. The company produced 6,000 rackets and sold 4,900. Each racket was sold at a price of $90. Fixed overhead costs are $78,000, and fixed selling and administrative costs are $65,200. The company also reports the following per unit variable costs for the year: Variable product costs Variable selling and administrative expenses $25.00 $ 2.00 Prepare an income statement under absorption costing. ACES INC. Absorption Costing Income Statement Sales 441,000 Less: Cost of goods sold Variable production costs 122,500 Fixed overhead costs Cost of goods sold 122,500 Gross margin Selling general and administrative expenses %24 %24
Transcribed Image Text:Aces Inc., a manufacturer of tennis rackets, began operations this year. The company produced 6,000 rackets and sold 4,900. Each racket was sold at a price of $90. Fixed overhead costs are $78,000, and fixed selling and administrative costs are $65,200. The company also reports the following per unit variable costs for the year: Variable product costs Variable selling and administrative expenses $25.00 $ 2.00 Prepare an income statement under absorption costing. ACES INC. Absorption Costing Income Statement Sales 441,000 Less: Cost of goods sold Variable production costs 122,500 Fixed overhead costs Cost of goods sold 122,500 Gross margin Selling general and administrative expenses %24 %24
Prepare an income statement under absorption costing. ACES INC. Absorption Costing Income Statement Sales 441,000 Less: Cost of goods sold Variable production costs $ 122,500 Fixed overhead costs 122,500 Cost of goods sold Gross margin Selling general and administrative expenses 65,200 Fixed selling and administrative costs 9,800 Variable selling and administrative expenses 75,000 Total fixed expenses 179,800 Net income (loss) %24 %24
Transcribed Image Text:Prepare an income statement under absorption costing. ACES INC. Absorption Costing Income Statement Sales 441,000 Less: Cost of goods sold Variable production costs $ 122,500 Fixed overhead costs 122,500 Cost of goods sold Gross margin Selling general and administrative expenses 65,200 Fixed selling and administrative costs 9,800 Variable selling and administrative expenses 75,000 Total fixed expenses 179,800 Net income (loss) %24 %24
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