During the first month of operations ended August 31, Kodiak Fridgeration Company manufactured 48,000 mini refrigerators, of which 44,000 were sold. Operating data for the month are summarized as follows: 1Sales $8,800,000.002Manufacturing costs: 3Direct materials$3,360,000.00 4Direct labor1,344,000.00 5Variable manufacturing cost816,000.00 6Fixed manufacturing cost528,000.006,048,000.007Selling and administrative expenses: 8Variable$528,000.00 9Fixed352,000.00880,000.00 Required:1.Prepare an income statement based on the absorption costing concept.*2.Prepare an income statement based on the variable costing concept.*3.Explain the reason for the difference in the amount of income from operations reported in (1) and (2). Labels August 31 Cost of goods sold Fixed costs For the Month Ended August 31 Variable cost of goods sold Amount Descriptions Contribution margin Contribution margin ratio Cost of goods manufactured Fixed manufacturing costs Fixed selling and administrative expenses Gross profit Income from operations Inventory, August 31 Loss from operations Manufacturing margin Planned contribution margin Sales Sales mix Selling and administrative expenses Total cost of goods sold Total fixed costs Total variable cost of goods sold Variable cost of goods manufactured Variable selling and administrative expenses 1. Prepare an income statement based on the absorption costing concept. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. A colon (:) will automatically appear if required. Enter Inventory, August 31 as a negative number using a minus sign. If a net loss is incurred, enter that amount as a negative number using a minus sign. Question not attempted.Kodiak Fridgeration CompanyScore: 0/68Absorption Costing Income Statement(Label)12 (Label)567 2. Prepare an income statement based on the variable costing concept. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answerchoices for text entries. Be sure to complete the statement heading. A colon (:) will automatically appear if required. Enter Inventory, August 31 as a negative numberusing a minus sign. If a net loss is incurred, enter that amount as a negative number using a minus sign.jeQuestion not attempted.Kodiak Fridgeration CompanyScore: 0/102-ciectVariable Costing Income StatementPhotos - Capture2.PNG(Label)A See all photos+ Add to12 (Label)12139 (Label)1011

Variable costing does not include the fixed manufacturing overhead whereas, absorption costing…

Answered: During the first month of operations…

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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Question

During the first month of operations ended August 31, Kodiak Fridgeration Company manufactured 48,000 mini refrigerators, of which 44,000 were sold. Operating data for the month are summarized as follows:

1	Sales		$8,800,000.00
2	Manufacturing costs:
3	Direct materials	$3,360,000.00
4	Direct labor	1,344,000.00
5	Variable manufacturing cost	816,000.00
6	Fixed manufacturing cost	528,000.00	6,048,000.00
7	Selling and administrative expenses:
8	Variable	$528,000.00
9	Fixed	352,000.00	880,000.00

Required:

Prepare an income statement based on the absorption costing concept.*

Prepare an income statement based on the variable costing concept.*

Explain the reason for the difference in the amount of income from operations reported in (1) and (2).

Labels
August 31
Cost of goods sold
Fixed costs
For the Month Ended August 31
Variable cost of goods sold
Amount Descriptions
Contribution margin
Contribution margin ratio
Cost of goods manufactured
Fixed manufacturing costs
Fixed selling and administrative expenses
Gross profit
Income from operations
Inventory, August 31
Loss from operations
Manufacturing margin
Planned contribution margin
Sales
Sales mix
Selling and administrative expenses
Total cost of goods sold
Total fixed costs
Total variable cost of goods sold
Variable cost of goods manufactured
Variable selling and administrative expenses

1. Prepare an income statement based on the absorption costing concept. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. A colon (:) will automatically appear if required. Enter Inventory, August 31 as a negative number using a minus sign. If a net loss is incurred, enter that amount as a negative number using a minus sign.

Question not attempted.
Kodiak Fridgeration Company
Score: 0/68
Absorption Costing Income Statement
(Label)
1
2 (Label)
5
6
7

2. Prepare an income statement based on the variable costing concept. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer
choices for text entries. Be sure to complete the statement heading. A colon (:) will automatically appear if required. Enter Inventory, August 31 as a negative number
using a minus sign. If a net loss is incurred, enter that amount as a negative number using a minus sign.
je
Question not attempted.
Kodiak Fridgeration Company
Score: 0/102
-ciect
Variable Costing Income Statement
Photos - Capture2.PNG
(Label)
A See all photos
+ Add to
1
2 (Label)
12
13
9 (Label)
10
11

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