Title: AJ Manufacturing Company Income Statement AnalysisAJ Manufacturing Company incurred $50,000 of fixed product cost and $40,000 of variable product cost during its first year of operation. Also, during its first year, AJ incurred $16,000 of fixed and $13,000 of variable selling and administrative costs. The company sold all of the units it produced for $160,000.**Required:**a. Prepare an income statement using the format required by generally accepted accounting principles (GAAP).b. Prepare an income statement using the contribution margin approach.**Instructions:**Complete this question by entering your answers in the tabs below.**Template:**- **AJ MANUFACTURING COMPANY** - **Income Statement** - (Use the format required by generally accepted accounting principles (GAAP).)For the income statement, you will need to calculate and outline the following:1. **Revenue**: Total sales revenue, which amounts to $160,000. 2. **Cost of Goods Sold (COGS)**: - Fixed product costs: $50,000 - Variable product costs: $40,000 - Total COGS = $50,000 + $40,000 = $90,0003. **Gross Profit**: - Gross Profit = Revenue - COGS - Gross Profit = $160,000 - $90,000 = $70,0004. **Operating Expenses**: - Fixed Selling and Administrative Costs: $16,000 - Variable Selling and Administrative Costs: $13,000 - Total Operating Expenses = $16,000 + $13,000 = $29,0005. **Net Income**: - Net Income = Gross Profit - Operating Expenses - Net Income = $70,000 - $29,000 = $41,000This structured breakdown helps in understanding how AJ Manufacturing Company operates financially under the GAAP framework as well as providing clarity on operational costs. **AJ Manufacturing Company**AJ Manufacturing Company incurred $50,000 of fixed product cost and $40,000 of variable product cost during its first year of operation. Also during its first year, AJ incurred $16,000 of fixed and $13,000 of variable selling and administrative costs. The company sold all of the units it produced for $160,000.**Required**a. Prepare an income statement using the format required by generally accepted accounting principles (GAAP). b. Prepare an income statement using the contribution margin approach.**Complete this question by entering your answers in the tabs below.**- Required A- Required B---**Prepare an income statement using the contribution margin approach.****AJ MANUFACTURING COMPANY** Income Statement| | | ||----------------------------|-----------|-----------|| | | || | | || | | || | | |- Required A- Required B

AJ MANUFACTURING COMPANY Income Statement Revenue $1,60,000 Cost of goods sold…

AJ Manufacturing Company incurred $50,000 of fixed product cost and $40,000 of variable product cost during its first year of operation. Also during its first year, AJ incurred $16,000 of fixed and $13,000 of variable selling and administrative costs. The company sold all of the units it produced for $160,000. Required a. Prepare an income statement using the format required by generally accepted accounting Principles (GAAP). b. Prepare an income statement using the contribution margin approach.

AJ Manufacturing Company incurred $50,000 of fixed product cost and $40,000 of variable product cost during its first year of operation. Also during its first year, AJ incurred $16,000 of fixed and $13,000 of variable selling and administrative costs. The company sold all of the units it produced for $160,000. Required a. Prepare an income statement using the format required by generally accepted accounting Principles (GAAP). b. Prepare an income statement using the contribution margin approach.

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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