During the first month of operations ended August 31, Kodiak Fridgeration Company manufactured 44,000 mini refrigerators, of which 39,000 were sold. Operating data for the month are summarized as follows: 1Sales $7,020,000.002Manufacturing costs: 3Direct materials$3,080,000.00 4Direct labor1,056,000.00 5Variable manufacturing cost880,000.00 6Fixed manufacturing cost616,000.005,632,000.007Selling and administrative expenses: 8Variable$663,000.00 9Fixed273,000.00936,000.00 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 operating income reported in (1) and (2). * Be sure to complete the statement heading. Refer to the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. A colon (:) will automatically appear if it is required. Enter amounts as positive numbers unless the amount is a calculation that results in a negative amount. For example: Net loss should be negativeLabels 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 Operating income 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 expenses1. Prepare an income statement based on the absorption costing concept. Be sure to complete the statement heading. Refer to the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. A colon (:) will automatically appear if it is required. Enter amounts as positive numbers unless the amount is a calculation that results in a negative amount. For example: Net loss should be negative. Kodiak Fridgeration CompanyAbsorption Costing Income Statement 1 2 3 4 5 6 7 8 Prepare an income statement based on the variable costing concept. Be sure to complete the statement heading. Refer to the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. A colon (:) will automatically appear if it is required. Enter amounts as positive numbers unless the amount is a calculation that results in a negative amount. For example: Net loss should be negative. Kodiak Fridgeration CompanyVariable Costing Income Statement 1 2 3 4 5 6 7 8 9 10 11 12 13 3. Explain the reason for the difference in the amount of operating income reported in (1) and (2).The Operating income reported undercosting exceeds the Operating income reported undercosting, due to▼ manufacturing costs that are deferred to a future month under▼ costing.

Name: During the first month of operations ended August 31, Kodiak Fridgerat
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Description: During the first month of operations ended August 31, Kodiak Fridgeration Company manufactured 44,000 mini refrigerators, of which 39,000 were sold. Operating data for the month are summarized as follows: 1Sales $7,020,000.002Manufacturing costs: 3D

An income statements statement that shows a company's income and expenses. It also indicates whether…

Answered: g the first month of operations ended…

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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During the first month of operations ended August 31, Kodiak Fridgeration Company manufactured 44,000 mini refrigerators, of which 39,000 were sold. Operating data for the month are summarized as follows:

1	Sales		$7,020,000.00
2	Manufacturing costs:
3	Direct materials	$3,080,000.00
4	Direct labor	1,056,000.00
5	Variable manufacturing cost	880,000.00
6	Fixed manufacturing cost	616,000.00	5,632,000.00
7	Selling and administrative expenses:
8	Variable	$663,000.00
9	Fixed	273,000.00	936,000.00

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 operating income reported in (1) and (2).

* Be sure to complete the statement heading. Refer to the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. A colon (:) will automatically appear if it is required. Enter amounts as positive numbers unless the amount is a calculation that results in a negative amount. For example: Net loss should be negative

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
Operating income
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. Be sure to complete the statement heading. Refer to the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. A colon (:) will automatically appear if it is required. Enter amounts as positive numbers unless the amount is a calculation that results in a negative amount. For example: Net loss should be negative.

Kodiak Fridgeration Company

Absorption Costing Income Statement

1
2
3
4
5
6
7
8

Prepare an income statement based on the variable costing concept. Be sure to complete the statement heading. Refer to the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. A colon (:) will automatically appear if it is required. Enter amounts as positive numbers unless the amount is a calculation that results in a negative amount. For example: Net loss should be negative.

Kodiak Fridgeration Company

Variable Costing Income Statement

1
2
3
4
5
6
7
8
9
10
11
12
13

3. Explain the reason for the difference in the amount of operating income reported in (1) and (2).
The Operating income reported under
costing exceeds the Operating income reported under
costing, due to
▼ manufacturing costs that are deferred to a future month under
▼ costing.

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g the first month of operations ended August 31, Kodiak Fridgeration Company manufactured 44,000 mini refrigerators, of which 39,000 were sold. Operating data for the month are summarized as follows: 1 Sales $7,020,000.00 2 Manufacturing costs: 3 Direct materials $3,080,000.00 4 Direct labor 1,056