Hayek Bikes prepares the income statement under variable costing for its managerial reports, and it prepares the income statement under absorption costing for external reporting. For its first month of operations, 350 bikes were produced and 225 were sold. Income statement information under variable costing follows. Sales (225 x $1,750) Variable cost of goods sold (225 x $625) Variable selling and administrative expenses (225 x $60) Contribution margin Fixed overhead Fixed selling and administrative expenses Income Prepare the company's income statement under absorption costing. $ 393,750 140, 625 13,500 239,625 66,500 90,000 $ 83,125

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Hayek Bikes prepares the income statement under variable costing for its managerial reports, and it prepares the income statement
under absorption costing for external reporting. For its first month of operations, 350 bikes were produced and 225 were sold. Income
statement information under variable costing follows.
Sales (225 x $1,750)
Variable cost of goods sold (225 × $625)
Variable selling and administrative expenses (225 × $60)
Contribution margin
Fixed overhead
Fixed selling and administrative expenses
Income
Prepare the company's income statement under absorption costing.
HAYEK BIKES
Income Statement (Absorption Costing)
$ 393,750
140,625
13,500
239,625
66,500
90,000
$ 83,125
Transcribed Image Text:Hayek Bikes prepares the income statement under variable costing for its managerial reports, and it prepares the income statement under absorption costing for external reporting. For its first month of operations, 350 bikes were produced and 225 were sold. Income statement information under variable costing follows. Sales (225 x $1,750) Variable cost of goods sold (225 × $625) Variable selling and administrative expenses (225 × $60) Contribution margin Fixed overhead Fixed selling and administrative expenses Income Prepare the company's income statement under absorption costing. HAYEK BIKES Income Statement (Absorption Costing) $ 393,750 140,625 13,500 239,625 66,500 90,000 $ 83,125
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