Lynch Company manufactures and sells a single product. The following costs were incurred during the company's first year of operations:Variable costs per unit:Manufacturing:Direct materialsDirect labor$ 10$4Variable manufacturing overhead $2Variable selling and administrative $2Fixed costs per year:Fixed manufacturing overheadFixed selling and administrative$ 374,000$ 284,000During the year, the company produced 34,000 units and sold 26,000 units. The selling price of the company's product is $44 per unit.b. Prepare an income statement for the year.

The income statement also known as a profit and loss statement, is a financial report that provides…

Answered: During the year, the company produced…

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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Revenue and expense data for the current calendar year for Tannenhill Company and for the electronics industry are as follows. Tannenhill’s data are expressed in dollars. The electronics industry averages are expressed in percentages. TannenhillCompany ElectronicsIndustryAverage Sales $800,000 100 % Cost of goods sold 512,000 70 Gross profit $288,000 30 % Selling expenses $176,000 17 % Administrative expenses 64,000 7 Total operating expenses $240,000 24 % Operating income $48,000 6 % Other revenue 16,000 2 $64,000 8 % Other expense 8,000 1 Income before income tax $56,000 7 % Income tax expense 24,000 5 Net income $32,000 2 % a. Prepare a common-sized income statement comparing the results of operations for Tannenhill Company with the industry average. If required, round percentages to one decimal place. Enter all amounts as positive numbers.

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During the year, the company produced 34,000 units and sold 26,000 units. The selling price of the company's product is $44 per unit. b. Prepare an income statement for the year.