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High Country, Inc., produces and sells many recreational products. The company has just opened a new plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month of the plant's operation: Beginning inventory Units produced Units sold Selling price per unit Selling and administrative expenses: Variable per unit Fixed (per month) Manufacturing costs: Direct materials cost per unit Direct labor cost per unit Variable manufacturing overhead cost per unit Fixed manufacturing overhead cost (per month) $ 39,000 34,000 83 $ 4 $ 563,000 15 7 $ $ $ 4 $741,000

High Country, Inc., produces and sells many recreational products. The company has just opened a new plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month of the plant's operation: Beginning inventory Units produced Units sold Selling price per unit Selling and administrative expenses: Variable per unit Fixed (per month) Manufacturing costs: Direct materials cost per unit Direct labor cost per unit Variable manufacturing overhead cost per unit Fixed manufacturing overhead cost (per month) $ 39,000 34,000 83 $ 4 $ 563,000 15 7 $ $ $ 4 $741,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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REQUIRED: Prepare a contribution format income statement for May.

Just want to make sure ive got this right, am i missing anything?

### High Country, Inc. Variable Costing Income Statement #### Sales **Total Sales Revenue:** - **$2,822,000** #### Variable Expenses: 1. **Variable Cost of Goods Sold:** - **$884,000** #### Gross Margin - **Gross Margin:** - **(Sales - Variable Cost of Goods Sold)** - **$1,938,000** #### Fixed Expenses: 1. **Fixed Manufacturing Overhead:** - **$741,000** 2. **Fixed Selling and Administrative Expense:** - **$563,000** **Total Fixed Expenses:** - **(Fixed Manufacturing Overhead + Fixed Selling and Administrative Expense)** - **$1,304,000** #### Net Operating Income - **(Gross Margin - Total Fixed Expenses)** - **$634,000** ### Explanation This income statement uses variable costing, where only variable costs are included in the cost of goods sold, and fixed manufacturing overhead is treated as a period cost. The statement organizes sales revenue, variable and fixed expenses, and ultimately calculates the net operating income for the company. Key figures and calculations are presented in a tabular format for clarity.
Transcribed Image Text:### High Country, Inc. Variable Costing Income Statement #### Sales **Total Sales Revenue:** - **$2,822,000** #### Variable Expenses: 1. **Variable Cost of Goods Sold:** - **$884,000** #### Gross Margin - **Gross Margin:** - **(Sales - Variable Cost of Goods Sold)** - **$1,938,000** #### Fixed Expenses: 1. **Fixed Manufacturing Overhead:** - **$741,000** 2. **Fixed Selling and Administrative Expense:** - **$563,000** **Total Fixed Expenses:** - **(Fixed Manufacturing Overhead + Fixed Selling and Administrative Expense)** - **$1,304,000** #### Net Operating Income - **(Gross Margin - Total Fixed Expenses)** - **$634,000** ### Explanation This income statement uses variable costing, where only variable costs are included in the cost of goods sold, and fixed manufacturing overhead is treated as a period cost. The statement organizes sales revenue, variable and fixed expenses, and ultimately calculates the net operating income for the company. Key figures and calculations are presented in a tabular format for clarity.
**High Country, Inc. Folding Camp Cot Production Analysis: May Overview** High Country, Inc. produces and sells numerous recreational products. Recently, the company initiated operations at a new plant aimed at manufacturing a folding camp cot to be distributed across the United States. The cost and revenue data for May, the inaugural month of this plant's operation, are detailed below: ### Production and Sales Data: - **Beginning Inventory**: 0 units - **Units Produced**: 39,000 units - **Units Sold**: 34,000 units - **Selling Price per Unit**: $83 ### Cost Analysis: #### Selling and Administrative Expenses: - **Variable Cost per Unit**: $4 - **Fixed Costs (per month)**: $563,000 #### Manufacturing Costs: - **Direct Materials Cost per Unit**: $15 - **Direct Labor Cost per Unit**: $7 - **Variable Manufacturing Overhead Cost per Unit**: $4 - **Fixed Manufacturing Overhead Cost (per month)**: $741,000 ### Summary: Management is keen to evaluate the profitability metrics of the new folding camp cot line for the month of May. **Graph/Diagram Explanation:** There are no graphs or diagrams included in the provided image. However, if needed, illustrative charts showing cost breakdowns, unit comparison (produced vs. sold), and income statements could enhance the analysis. **Key Notes:** This data serves as a foundational reference to assess the new product's financial performance, and help in strategic planning and operational adjustments for the subsequent months.
Transcribed Image Text:**High Country, Inc. Folding Camp Cot Production Analysis: May Overview** High Country, Inc. produces and sells numerous recreational products. Recently, the company initiated operations at a new plant aimed at manufacturing a folding camp cot to be distributed across the United States. The cost and revenue data for May, the inaugural month of this plant's operation, are detailed below: ### Production and Sales Data: - **Beginning Inventory**: 0 units - **Units Produced**: 39,000 units - **Units Sold**: 34,000 units - **Selling Price per Unit**: $83 ### Cost Analysis: #### Selling and Administrative Expenses: - **Variable Cost per Unit**: $4 - **Fixed Costs (per month)**: $563,000 #### Manufacturing Costs: - **Direct Materials Cost per Unit**: $15 - **Direct Labor Cost per Unit**: $7 - **Variable Manufacturing Overhead Cost per Unit**: $4 - **Fixed Manufacturing Overhead Cost (per month)**: $741,000 ### Summary: Management is keen to evaluate the profitability metrics of the new folding camp cot line for the month of May. **Graph/Diagram Explanation:** There are no graphs or diagrams included in the provided image. However, if needed, illustrative charts showing cost breakdowns, unit comparison (produced vs. sold), and income statements could enhance the analysis. **Key Notes:** This data serves as a foundational reference to assess the new product's financial performance, and help in strategic planning and operational adjustments for the subsequent months.
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