Columbia Corporation produces a single product. The company's variable costing income statement for November appears below: Columbia Corporation Income Statement For the Month ended November 30 Sales ($30 per unit) $ 1,200,000 Variable expenses: Variable cost of goods sold 720,000 Variable selling expense 160,000 Total variable expenses 880,000 Contribution margin 320,000 Fixed expenses: Manufacturing 140,000 Selling and administrative 35,000 Total fixed expenses 175,000 Net operating income $ 145,000 During November, 35,000 units were manufactured and 8,000 units were in beginning inventory. Variable production costs have remained constant on a per unit basis over the past several months. Under absorption costing, for November the company would report a: $120,000 profit $125,000 profit $125,000 loss $145,000 profit
Columbia Corporation produces a single product. The company's variable costing income statement for November appears below: Columbia Corporation Income Statement For the Month ended November 30 Sales ($30 per unit) $ 1,200,000 Variable expenses: Variable cost of goods sold 720,000 Variable selling expense 160,000 Total variable expenses 880,000 Contribution margin 320,000 Fixed expenses: Manufacturing 140,000 Selling and administrative 35,000 Total fixed expenses 175,000 Net operating income $ 145,000 During November, 35,000 units were manufactured and 8,000 units were in beginning inventory. Variable production costs have remained constant on a per unit basis over the past several months. Under absorption costing, for November the company would report a: $120,000 profit $125,000 profit $125,000 loss $145,000 profit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Columbia Corporation produces a single product. The company's variable costing income statement for November appears below:
During November, 35,000 units were manufactured and 8,000 units were in beginning inventory. Variable production costs have remained constant on a per unit basis over the past several months.
Under absorption costing, for November the company would report a:
| Columbia Corporation | ||
| Income Statement | ||
| For the Month ended November 30 | ||
| Sales ($30 per unit) | $ | 1,200,000 |
| Variable expenses: | ||
| Variable cost of goods sold | 720,000 | |
| Variable selling expense | 160,000 | |
| Total variable expenses | 880,000 | |
| Contribution margin | 320,000 | |
| Fixed expenses: | ||
| Manufacturing | 140,000 | |
| Selling and administrative | 35,000 | |
| Total fixed expenses | 175,000 | |
| Net operating income | $ | 145,000 |
During November, 35,000 units were manufactured and 8,000 units were in beginning inventory. Variable production costs have remained constant on a per unit basis over the past several months.
Under absorption costing, for November the company would report a:
|
$120,000 profit
|
||
|
$125,000 profit
|
||
|
$125,000 loss
|
||
|
$145,000 profit
|
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