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Aces Incorporated, a manufacturer of tennis rackets, began operations this year. The company produced 7,450 rackets and sold 5,630. Each racket was sold at a price of $90. Fixed overhead costs are $96,850 per year, and fixed selling and administrative costs are $68,200 per year. The company also reports the following per unit variable costs for the year. Direct materials. Direct labor Variable overhead Variable selling and administrative expenses Prepare an income statement under variable costing. Answer is complete but not entirely correct. ACES INCORPORATED Income Statement (Variable Costing) Sales Plus: Variable expenses Variable selling and administrative expenses Variable cost of goods sold Variable cost of goods sold Contribution margin Plus Fixed expenses Fixed overhead Fixed selling and administrative expenses Income O O ✪ ♥ 000 Ⓡ3 3 140,750 11,260 $ 96,850 68.200 $ 506,700 O 152,010 304,020 165,050 $ 268,720 $ 12 8

Aces Incorporated, a manufacturer of tennis rackets, began operations this year. The company produced 7,450 rackets and sold 5,630. Each racket was sold at a price of $90. Fixed overhead costs are $96,850 per year, and fixed selling and administrative costs are $68,200 per year. The company also reports the following per unit variable costs for the year. Direct materials. Direct labor Variable overhead Variable selling and administrative expenses Prepare an income statement under variable costing. Answer is complete but not entirely correct. ACES INCORPORATED Income Statement (Variable Costing) Sales Plus: Variable expenses Variable selling and administrative expenses Variable cost of goods sold Variable cost of goods sold Contribution margin Plus Fixed expenses Fixed overhead Fixed selling and administrative expenses Income O O ✪ ♥ 000 Ⓡ3 3 140,750 11,260 $ 96,850 68.200 $ 506,700 O 152,010 304,020 165,050 $ 268,720 $ 12 8

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 Incorporated, a manufacturer of tennis rackets, began operations this year. The company produced 7,450 rackets and sold 5,630. Each racket was sold at a price of $90. Fixed overhead costs are $96,850 per year, and fixed selling and administrative costs are $68,200 per year. The company also reports the following per unit variable costs for the year. Direct materials. Direct labor Variable overhead Variable selling and administrative expenses Prepare an income statement under variable costing. Answer is complete but not entirely correct. ACES INCORPORATED Income Statement (Variable Costing) Sales Plus: Variable expenses Variable selling and administrative expenses Variable cost of goods sold Variable cost of goods sold Contribution margin Plus: Fixed expenses Fixed overhead Fixed selling and administrative expenses Income ›***0000 3 140,750 11,260 $ 96,850 68,200 506,700 152,010 304,020 165,050 $ 268,720 $ 12 8 5 2
Transcribed Image Text:Aces Incorporated, a manufacturer of tennis rackets, began operations this year. The company produced 7,450 rackets and sold 5,630. Each racket was sold at a price of $90. Fixed overhead costs are $96,850 per year, and fixed selling and administrative costs are $68,200 per year. The company also reports the following per unit variable costs for the year. Direct materials. Direct labor Variable overhead Variable selling and administrative expenses Prepare an income statement under variable costing. Answer is complete but not entirely correct. ACES INCORPORATED Income Statement (Variable Costing) Sales Plus: Variable expenses Variable selling and administrative expenses Variable cost of goods sold Variable cost of goods sold Contribution margin Plus: Fixed expenses Fixed overhead Fixed selling and administrative expenses Income ›***0000 3 140,750 11,260 $ 96,850 68,200 506,700 152,010 304,020 165,050 $ 268,720 $ 12 8 5 2
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