Estimated Income Statements, using Absorption and Variable CostingPrior to the first month of operations ending January 31, Lemke Inc. estimated the following operating results:Sales (26,400 × $93)Manufacturing costs (26,400 units):Direct materialsDirect laborVariable factory overheadFixed factory overheadFixed selling and administrative expensesVariable selling and administrativeexpenses$2,455,200The company is evaluating a proposal to manufacture 29,600 units instead of 26,400 units, thus creating an ending inventory of 3,200 units. Manufacturing the additional unitswill not change sales, unit variable factory overhead costs, total fixed factory overhead cost, or total selling and administrative expenses.Line Item Description1,483,680351,120163,680195,36053,100a. 1. Prepare an estimated income statement, comparing operating results if 26,400 and 29,600 units are manufactured in the absorption costing format. If an amount box doesnot require an entry leave it blank.Inventory, January 31Cost of goods sold:64,300Lemke Inc.Absorption Costing Income StatementFor the Month Ending January 31X26,400 UnitsManufactured29,600 UnitsManufactured$2,193,840 X $ 1,956,668 X a. 2. Prepare an estimated income statement, comparing operating results if 26,400 and 29,600 units are manufactured in the variable costing format. If an amount box doesnot require an entry leave it blank.Lemke Inc.Variable Costing Income StatementFor the Month Ending January 31Line Item DescriptionVariable cost of goods sold:Fixed costs:Total fixed costsFeedback26,400 Units 29,600 UnitsManufactured Manufactured

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Description: Estimated Income Statements, using Absorption and Variable CostingPrior to the first month of operations ending January 31, Lemke Inc. estimated the following operating results:Sales (26,400 × $93)Manufacturing costs (26,400 units):Direct materialsD

Preparation of income statement under absorption costing and variable costing system are as follows.

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Estimated Income Statements, using Absorption and Variable Costing Prior to the first month of operations ending January 31, Lemke Inc. estimated the following operating results: Sales (26,400 × $93) Manufacturing costs (26,400 units): Direct materials Direct labor Variable factory overhead Fixed factory overhead Fixed selling and administrative expenses Variable selling and administrative expenses $2,455,200 1,483,680 351,120 163,680 195,360 53,100 64,300 The company is evaluating a proposal to manufacture 29,600 units instead of 26,400 units, thus creating an ending inventory of 3,200 units. Manufacturing the additional units will not change sales, unit variable factory overhead costs, total fixed factory overhead cost, or total selling and administrative expenses. a. 1. Prepare an estimated income statement, comparing operating results if 26,400 and 29,600 units are manufactured in the absorption costing format. If an amount box does not require an entry leave it blank. Lemke Inc

Estimated Income Statements, using Absorption and Variable Costing Prior to the first month of operations ending January 31, Lemke Inc. estimated the following operating results: Sales (26,400 × $93) Manufacturing costs (26,400 units): Direct materials Direct labor Variable factory overhead Fixed factory overhead Fixed selling and administrative expenses Variable selling and administrative expenses $2,455,200 1,483,680 351,120 163,680 195,360 53,100 64,300 The company is evaluating a proposal to manufacture 29,600 units instead of 26,400 units, thus creating an ending inventory of 3,200 units. Manufacturing the additional units will not change sales, unit variable factory overhead costs, total fixed factory overhead cost, or total selling and administrative expenses. a. 1. Prepare an estimated income statement, comparing operating results if 26,400 and 29,600 units are manufactured in the absorption costing format. If an amount box does not require an entry leave it blank. Lemke Inc

FINANCIAL ACCOUNTING

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ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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