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

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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