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Cool Sky reports the following for its first year of operations. The company produced 44,000 units and sold 36,000 units at a price of $110 per unit. Sales Direct materials Direct labor Variable overhead Fixed overhead Variable selling and administrative expenses Fixed selling and administrative expenses 2b. Assume the company uses variable costing. Prepare its income statement for the year under variable costing. $ 42 per unit $16 per unit $5 per unit $ 396,000 per year. $ 12 per unit $ 120,000 per year Income Statement (Variable Costing)

Cool Sky reports the following for its first year of operations. The company produced 44,000 units and sold 36,000 units at a price of $110 per unit. Sales Direct materials Direct labor Variable overhead Fixed overhead Variable selling and administrative expenses Fixed selling and administrative expenses 2b. Assume the company uses variable costing. Prepare its income statement for the year under variable costing. $ 42 per unit $16 per unit $5 per unit $ 396,000 per year. $ 12 per unit $ 120,000 per year Income Statement (Variable Costing)

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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[The following information applies to the questions displayed below] Cool Sky reports the following for its first year of operations. The company produced 44,000 units and sold 36,000 units at a price of $110 per unit. Direct materials Direct labor Variable overhead Fixed overhead Variable selling and administrative expenses Fixed selling and administrative expenses 2b. Assume the company uses variable costing. Prepare its income statement for the year under variable costing. Income Income Statement (Variable Costing) Sales Less: Variable expenses Variable selling and administrative expenses Variable cost of goods sold Contribution margin Less: Fixed expenses Fixed selling and administrative expenses Fixed overhead $ 42 per unit $ 16 per unit $5 per unit $ 396,000 per year $12 per unit $ 120,000 per year
Transcribed Image Text:[The following information applies to the questions displayed below] Cool Sky reports the following for its first year of operations. The company produced 44,000 units and sold 36,000 units at a price of $110 per unit. Direct materials Direct labor Variable overhead Fixed overhead Variable selling and administrative expenses Fixed selling and administrative expenses 2b. Assume the company uses variable costing. Prepare its income statement for the year under variable costing. Income Income Statement (Variable Costing) Sales Less: Variable expenses Variable selling and administrative expenses Variable cost of goods sold Contribution margin Less: Fixed expenses Fixed selling and administrative expenses Fixed overhead $ 42 per unit $ 16 per unit $5 per unit $ 396,000 per year $12 per unit $ 120,000 per year
A manufacturer reports the following information for the past three years. Year 1 $ 113,000 Variable costing incone Beginning finished goods inventory (units) Ending finished goods inventory (units) Fixed overhead (FOR) per unit Variable costing income Absorption costing income Year 1 0 1,300 $4.00 Compute income for each of the three years using absorption costing. Hint Fixed overhead in inventory equals the FOH per unit * Units in inventory. (Amounts to be deducted should be indicated with a minus sign.) Year 2 Year 2 $ 117,600 1,300 800 $ 4.00 Year 3 Year 3 $121,450 800 900 $ 4.00
Transcribed Image Text:A manufacturer reports the following information for the past three years. Year 1 $ 113,000 Variable costing incone Beginning finished goods inventory (units) Ending finished goods inventory (units) Fixed overhead (FOR) per unit Variable costing income Absorption costing income Year 1 0 1,300 $4.00 Compute income for each of the three years using absorption costing. Hint Fixed overhead in inventory equals the FOH per unit * Units in inventory. (Amounts to be deducted should be indicated with a minus sign.) Year 2 Year 2 $ 117,600 1,300 800 $ 4.00 Year 3 Year 3 $121,450 800 900 $ 4.00
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