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, 400 bikes were produced and 240 were sold Income statement information under variable costing follows. Sales (240 * $1,775) Variable cost of goods sold (240x1600) Variable selling and administrative expenses (248 565) Contribution margin $426,000 144,000 15,600 266,400 Fixed overhead 68,000 Fixed selling and administrative expenses 75,900 Income $123,400 Prepare the company's income statement under absorption costing. HAYEK BIKES Income Statement (Absorption Costing) S 426,000 Sales Cost of goods sold 428,000 Gross profit $ 426.000 Selling and administrative expenses Income Required information [The following information applies to the questions displayed below] Barnes Company reports the following for its product for first year of operations Direct materials Direct labor $ 35 per unit Variable overhead $ 25 per unit $ 10 per unit Fixed overhead $ 48,000 per year Variable selling and administrative expenses $3 per unit Fixed selling and administrative expenses $ 20,000 per year The company sells its product for $150 per unit. Compute gross profit using absorption costing assuming the company (al produces and sells 2,000 units and (b) produces 2,400 units and sells 2,000 units. Answer is not complete. (a) 2,000 Units (b) 2,400 Units Produced and 2,000 Units Sold Produced and 2.000 Units Sold Gross profit using absorption costing Sales Cost of goods sold Gross profit
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, 400 bikes were produced and 240 were sold Income statement information under variable costing follows. Sales (240 * $1,775) Variable cost of goods sold (240x1600) Variable selling and administrative expenses (248 565) Contribution margin $426,000 144,000 15,600 266,400 Fixed overhead 68,000 Fixed selling and administrative expenses 75,900 Income $123,400 Prepare the company's income statement under absorption costing. HAYEK BIKES Income Statement (Absorption Costing) S 426,000 Sales Cost of goods sold 428,000 Gross profit $ 426.000 Selling and administrative expenses Income Required information [The following information applies to the questions displayed below] Barnes Company reports the following for its product for first year of operations Direct materials Direct labor $ 35 per unit Variable overhead $ 25 per unit $ 10 per unit Fixed overhead $ 48,000 per year Variable selling and administrative expenses $3 per unit Fixed selling and administrative expenses $ 20,000 per year The company sells its product for $150 per unit. Compute gross profit using absorption costing assuming the company (al produces and sells 2,000 units and (b) produces 2,400 units and sells 2,000 units. Answer is not complete. (a) 2,000 Units (b) 2,400 Units Produced and 2,000 Units Sold Produced and 2.000 Units Sold Gross profit using absorption costing Sales Cost of goods sold Gross profit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Question
![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, 400 bikes were produced and 240 were sold Income
statement information under variable costing follows.
Sales (240 * $1,775)
Variable cost of goods sold (240x $600)
$ 420,000
Variable selling and administrative expenses (248 $65)
Contribution margin
144,000
15,600
266,400
Fixed overhead
68,000
Fixed selling and administrative expenses
75,990
Income
$ 123,400
Prepare the company's income statement under absorption costing.
HAYEK BIKES
Income Statement (Absorption Costing)
S
426,000
Sales
Cost of goods sold
426,000
Gross profit
$
426,000
Selling and administrative expenses
Income
Required information
(The following information applies to the questions displayed below]
Barnes Company reports the following for its product for its first year of operations.
Direct materials
Direct labor
$ 35 per unit
Variable overhead
$ 25 per unit
Fixed overhead
$10 per unit
$ 48,000 per year
Variable selling and administrative expenses
$3 per unit
Fixed selling and administrative expenses
$ 20,000 per year
The company sells its product for $150 per unit. Compute gross profit using absorption costing assuming the company (al produces
and sells 2,000 units and (b) produces 2,400 units and sells 2,000 units.
Answer is not complete.
(b) 2,400 Units
(a) 2,000 Units
Produced and 2.000
Units Sold
Produced and 2,000
Gross profit using absorption costing
Units Sold
Sales
Cost of goods sold
Gross profit
00
Required information
[The following information applies to the questions displayed below]
Barnes Company reports the following for its product for its first year of operations.
Direct materials
$ 35 per unit
Direct labor
$25 per unit
Variable overhead
$10 per unit
Fixed overhead
$ 43,000 per year
Variable selling and administrative expenses
$3 per unit
Fixed selling and administrative expenses
$ 20,000 per year
The company sells its product for $150 per unit. Compute contribution margin using variable costing assuming the company
produces and sells 2,000 units and (b) produces 2,400 units and sells 2.000 units.
(a) 2,000 Units Produced and (0 2,400 Ute Producat
and 2.000 Unils Sold
2,000 Units Sald
Contribution margin using variable costing
Sales
Variable expenses
Variable selling and administrative expenses
Contribution margin](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4f5a5f83-864f-43d6-91b5-098f162e7ade%2Ff0ffdbff-269a-4170-bb68-a6d18ea59083%2Fgf13olo_processed.jpeg&w=3840&q=75)
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, 400 bikes were produced and 240 were sold Income
statement information under variable costing follows.
Sales (240 * $1,775)
Variable cost of goods sold (240x $600)
$ 420,000
Variable selling and administrative expenses (248 $65)
Contribution margin
144,000
15,600
266,400
Fixed overhead
68,000
Fixed selling and administrative expenses
75,990
Income
$ 123,400
Prepare the company's income statement under absorption costing.
HAYEK BIKES
Income Statement (Absorption Costing)
S
426,000
Sales
Cost of goods sold
426,000
Gross profit
$
426,000
Selling and administrative expenses
Income
Required information
(The following information applies to the questions displayed below]
Barnes Company reports the following for its product for its first year of operations.
Direct materials
Direct labor
$ 35 per unit
Variable overhead
$ 25 per unit
Fixed overhead
$10 per unit
$ 48,000 per year
Variable selling and administrative expenses
$3 per unit
Fixed selling and administrative expenses
$ 20,000 per year
The company sells its product for $150 per unit. Compute gross profit using absorption costing assuming the company (al produces
and sells 2,000 units and (b) produces 2,400 units and sells 2,000 units.
Answer is not complete.
(b) 2,400 Units
(a) 2,000 Units
Produced and 2.000
Units Sold
Produced and 2,000
Gross profit using absorption costing
Units Sold
Sales
Cost of goods sold
Gross profit
00
Required information
[The following information applies to the questions displayed below]
Barnes Company reports the following for its product for its first year of operations.
Direct materials
$ 35 per unit
Direct labor
$25 per unit
Variable overhead
$10 per unit
Fixed overhead
$ 43,000 per year
Variable selling and administrative expenses
$3 per unit
Fixed selling and administrative expenses
$ 20,000 per year
The company sells its product for $150 per unit. Compute contribution margin using variable costing assuming the company
produces and sells 2,000 units and (b) produces 2,400 units and sells 2.000 units.
(a) 2,000 Units Produced and (0 2,400 Ute Producat
and 2.000 Unils Sold
2,000 Units Sald
Contribution margin using variable costing
Sales
Variable expenses
Variable selling and administrative expenses
Contribution margin
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