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Fresno Industries Inc. Variable Costing Income Statement For the Month Ended February 28 Fixed costs:

Fresno Industries Inc. Variable Costing Income Statement For the Month Ended February 28 Fixed costs:

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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Income Statements under Absorption Costing and Variable Costing Fresno Industries Inc. manufactures and sells high-quality camping tents. The company began operations on January 1 and operated at 100% of capacity (61,600 units) during the first month, creating an ending inventory of 5,600 units. During February, the company produced 56,000 units during the month but sold 61,600 units at $95 per unit. The February manufacturing costs and selling and administrative expenses were as follows: Manufacturing costs in February 1 beginning inventory: Variable Fixed Total Manufacturing costs in February: Variable Fixed Total Selling and administrative expenses in February: Variable Fixed Total Number of Units 5,600 5,600 Unit Cost 61,600 61,600 $38.00 14.00 $52.00 Total Cost $212,800 78,400 $291,200 56,000 $38.00 $2,128,000 56,000 15.40 862,400 $53.40 $2,990,400 $18.20 $1,121,120 7.00 431,200 $25.20 $1,552,320
Transcribed Image Text:Income Statements under Absorption Costing and Variable Costing Fresno Industries Inc. manufactures and sells high-quality camping tents. The company began operations on January 1 and operated at 100% of capacity (61,600 units) during the first month, creating an ending inventory of 5,600 units. During February, the company produced 56,000 units during the month but sold 61,600 units at $95 per unit. The February manufacturing costs and selling and administrative expenses were as follows: Manufacturing costs in February 1 beginning inventory: Variable Fixed Total Manufacturing costs in February: Variable Fixed Total Selling and administrative expenses in February: Variable Fixed Total Number of Units 5,600 5,600 Unit Cost 61,600 61,600 $38.00 14.00 $52.00 Total Cost $212,800 78,400 $291,200 56,000 $38.00 $2,128,000 56,000 15.40 862,400 $53.40 $2,990,400 $18.20 $1,121,120 7.00 431,200 $25.20 $1,552,320
) a. Prepare an income statement according to the absorption costing concept for the month ending February 28. Fresno Industries Inc. Absorption Costing Income Statement For the Month Ended February 28 Sales Cost of goods sold: Beginning inventory Cost of goods manufactured Total cost of goods sold Gross profit ✓ Selling and administrative expenses Operating income b. Prepare an income statement according to the variable costing concept for the month ending February 28. Fresno Industries Inc. Variable Costing Income Statement For the Month Ended February 28 Fixed costs: 291,200 ✔ 2,990,400 ✓ 00
Transcribed Image Text:) a. Prepare an income statement according to the absorption costing concept for the month ending February 28. Fresno Industries Inc. Absorption Costing Income Statement For the Month Ended February 28 Sales Cost of goods sold: Beginning inventory Cost of goods manufactured Total cost of goods sold Gross profit ✓ Selling and administrative expenses Operating income b. Prepare an income statement according to the variable costing concept for the month ending February 28. Fresno Industries Inc. Variable Costing Income Statement For the Month Ended February 28 Fixed costs: 291,200 ✔ 2,990,400 ✓ 00
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