Question Content AreaHappy Trails has the following information for its manufacturing:Direct Materials$16Direct Labor$14Variable Manufacturing Overhead$2Fixed Manufacturing Overhead$25Units Produced28,000Units Sold18,000Its income statement under absorption costing is:Sales$1,900,500Beginning Inventory$0Cost of Goods Manufactured1,596,000Cost of Goods Available for Sale$1,596,000- Ending Inventory570,000Cost of Goods Sold$1,026,000Gross Profit$874,500-Sales and Admin. Expenses: Variable$144,000Fixed300,000Total Sales and Admin. Expenses$444,000Net Operating Income$430,500Prepare an income statement with variable costing and a reconciliation statement between both methods. If an amount box does not require an entry, leave it blank. Happy TrailsVariable Costing Income Statement $- Select - $- Select - - Select - $- Select - - Select - $- Select - $- Select - - Select - $- Select - - Select - - Select -Total Sales and Administrative Expenses$fill in the blank 23 $- Select -Reconciliation: $- Select - - Select - $- Select -

A variable costing income statement subtracts all variable costs from revenue to get at a separately…

Answered: Happy Trails has the following…

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 Content Area

Happy Trails has the following information for its manufacturing:

Direct Materials	$16
Direct Labor	$14
Variable Manufacturing Overhead	$2
Fixed Manufacturing Overhead	$25
Units Produced	28,000
Units Sold	18,000

Its income statement under absorption costing is:

Sales	$1,900,500
Beginning Inventory	$0
Cost of Goods Manufactured	1,596,000
Cost of Goods Available for Sale	$1,596,000
- Ending Inventory	570,000
Cost of Goods Sold	$1,026,000
Gross Profit	$874,500
-Sales and Admin. Expenses:
Variable	$144,000
Fixed	300,000
Total Sales and Admin. Expenses	$444,000
Net Operating Income	$430,500

Prepare an income statement with variable costing and a reconciliation statement between both methods. If an amount box does not require an entry, leave it blank.

Happy TrailsVariable Costing Income Statement

	$- Select -
	$- Select -
	- Select -
	$- Select -
	- Select -
	$- Select -
	$- Select -
	- Select -
	$- Select -
	- Select -
	- Select -
Total Sales and Administrative Expenses	$fill in the blank 23
	$- Select -
Reconciliation:
	$- Select -
	- Select -
	$- Select -

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