Appliance Apps has the following costs associated with its production and sale of devices that allow appliances to receive commands from cell phones.Beginning Inventory0Units Produced24,000Units Sold19,200Selling Price per Unit$145Variable Sales and Administration Expenses$5Fixed Sales and Administration Expenses$931,200Direct Material Cost per Unit$25Direct Labor Cost per Unit$11Variable Manufacturing Overhead Cost per Unit$2Fixed Manufacturing Overhead Cost per Month$940,800Prepare a reconciliation between the two statements. ReconciliationNet Income under Variable Costing 86400Add: Fixed Manufacturing Overhead Deferred Net Income under Absorption Prepare an income statement under the variable costing method. If an amount box does not require an entry, leave it blank.Appliance AppsIncome Statement: VariableSales v2,784,000 VCost of Goods Sold:Beginning InventoryCost of Goods Manufactured v912,000Cost of Goods Available for Sale v912,000Ending Inventory v182,400 VTotal Cost of Goods Sold729,600 vGross Contribution Margin v2,054,400Sales and Administrative Expenses:Variable96,000 VContribution Margin v1,958,400Fixed Sales and Administrative Expenses931,200Fixed Manufacturing v940,800Total Fixed Sales and Administrative Expenses1,872,000 V Prepare an income statement under the absorption method. If an amount box does not require an entry, leave it blank.Appliance AppsIncome Statement: AbsorptionSales2,784,000Cost of Goods Sold:Beginning Inventory vCost of Goods Manufactured v1,852,800Cost of Goods Available for Sale v1,852,800Ending Inventory370,560Total Cost of Goods Sold1,482,240 vGross Profit v1,301,760 VSales and Administrative Expenses:Variable96,000Fixed931,200Total Fixed Sales and Administrative Expenses v1,027,200Net Operating Income v274,560

Fixed manufacturing overhead per unit = Fixed manufacturing overhead / Nos of units produced =…

Answered: Appliance Apps has the following costs…

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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Appliance Apps has the following costs associated with its production and sale of devices that allow appliances to receive commands from cell phones.

Beginning Inventory	0
Units Produced	24,000
Units Sold	19,200
Selling Price per Unit	$145
Variable Sales and Administration Expenses	$5
Fixed Sales and Administration Expenses	$931,200
Direct Material Cost per Unit	$25
Direct Labor Cost per Unit	$11
Variable Manufacturing Overhead Cost per Unit	$2
Fixed Manufacturing Overhead Cost per Month	$940,800

Prepare a reconciliation between the two statements.

Reconciliation
Net Income under Variable Costing	86400
Add: Fixed Manufacturing Overhead Deferred
Net Income under Absorption

Prepare an income statement under the variable costing method. If an amount box does not require an entry, leave it blank.
Appliance Apps
Income Statement: Variable
Sales v
2,784,000 V
Cost of Goods Sold:
Beginning Inventory
Cost of Goods Manufactured v
912,000
Cost of Goods Available for Sale v
912,000
Ending Inventory v
182,400 V
Total Cost of Goods Sold
729,600 v
Gross Contribution Margin v
2,054,400
Sales and Administrative Expenses:
Variable
96,000 V
Contribution Margin v
1,958,400
Fixed Sales and Administrative Expenses
931,200
Fixed Manufacturing v
940,800
Total Fixed Sales and Administrative Expenses
1,872,000 V

Prepare an income statement under the absorption method. If an amount box does not require an entry, leave it blank.
Appliance Apps
Income Statement: Absorption
Sales
2,784,000
Cost of Goods Sold:
Beginning Inventory v
Cost of Goods Manufactured v
1,852,800
Cost of Goods Available for Sale v
1,852,800
Ending Inventory
370,560
Total Cost of Goods Sold
1,482,240 v
Gross Profit v
1,301,760 V
Sales and Administrative Expenses:
Variable
96,000
Fixed
931,200
Total Fixed Sales and Administrative Expenses v
1,027,200
Net Operating Income v
274,560

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