Company A manufactures and sells one product. During the first year the company produced and sold 30000 units, during the second - the company produced 37500 units and sold 25000 units. The selling price is 29 €. Other information is provided in the table. Items Variable costs per unit: Direct materials Direct labour Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses Amounts 10 € 6 € 2€ 1€ 180 000 € 40 000 €

FINANCIAL ACCOUNTING
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Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Company A manufactures and sells one product. During the first year the company
produced and sold 30000 units, during the second - the company produced 37500
units and sold 25000 units. The selling price is 29 €. Other information is provided in
the table.
Items
Variable costs per unit:
Direct materials
Direct labour
Variable manufacturing overhead
Variable selling and administrative
Fixed costs per year:
Fixed manufacturing overhead
Fixed selling and administrative expenses
Amounts
10 €
6 €
2€
1€
180 000 €
40 000 €
Prepare the income statement, using absorption costing, and compute the gross profit
for the first year.
Answer:
Transcribed Image Text:Company A manufactures and sells one product. During the first year the company produced and sold 30000 units, during the second - the company produced 37500 units and sold 25000 units. The selling price is 29 €. Other information is provided in the table. Items Variable costs per unit: Direct materials Direct labour Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses Amounts 10 € 6 € 2€ 1€ 180 000 € 40 000 € Prepare the income statement, using absorption costing, and compute the gross profit for the first year. Answer:
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