**Income Statements Under Absorption Costing and Variable Costing**Fresno Industries Inc. manufactures and sells high-quality camping tents. The company began operations on January 1 and operated at 100% of capacity (204,000 units) during the first month, creating an ending inventory of 25,000 units. During February, the company produced 179,000 units during the month but sold 204,000 units at $530 per unit. The February manufacturing costs and selling and administrative expenses were as follows:| **Number of Units** | **Unit Cost** | **Total Cost** ||--------------------|--------------|---------------|- **Manufacturing Costs in February 1 Beginning Inventory:** - **Variable:** 25,000 units at $265.00 = $6,625,000 - **Fixed:** 25,000 units at $34.00 = $850,000 - **Total:** $299.00 per unit = $7,475,000- **Manufacturing Costs in February:** - **Variable:** 179,000 units at $265.00 = $47,435,000 - **Fixed:** 179,000 units at $39.20 = $7,016,800 - **Total:** $304.20 per unit = $54,451,800- **Selling and Administrative Expenses in February:** - **Variable:** 204,000 units at $26.10 = $5,324,400 - **Fixed:** 204,000 units at $1.00 = $204,000 - **Total:** $27.10 per unit = $5,528,400This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. ### Income Statement PreparationThis exercise involves preparing two types of income statements for Fresno Industries Inc. for the month ending February 28. The statements are based on two different costing methods: Absorption Costing and Variable Costing. #### a. Absorption Costing Income Statement**Fresno Industries Inc.****Absorption Costing Income Statement****For the Month Ended February 28**- **Cost of Goods Sold:** (Enter detailed list) - [Blank for input] [Amount]- Additional cost components, detailed breakdown: - [Blank for input] [Amount] - [Blank for input] [Amount]- Other Expenses: - [Blank for input] [Amount]- [Calculation Details] [Final Total Amount for Absorption Costing]#### b. Variable Costing Income Statement**Fresno Industries Inc.****Variable Costing Income Statement****For the Month Ended February 28**- **Sales:** - [Blank for input] [Amount]- **Variable Costs:** - [Blank for input] [Amount] - [Blank for input] [Amount] - **Contribution Margin:** - [Blank for input] [Amount][Final Total Amount for Variable Costing]**Instructions:** Enter all amounts as positive numbers in the spaces provided. The purpose of creating these statements is to compare the financial results and performance of Fresno Industries Inc. under different costing methodologies for the month of February. Each format highlights the impact of fixed and variable costs on the company's profitability.

The company prepares the income statement as per the requirement of SEBI guidelines to depict the…

Income statements under absorption costing and variable costing Fresno Industries Inc. manufactures and sells high-quality camping tents. The company began operations on January 1 and operated at 100% of capacity (204,000 units) during the first month, creating an ending inventory of 25,000 units. During February, the company produced 179,000 units during the month but sold 204,000 units at $530 per unit. The February manufacturing costs and selling and administrative expenses were as follows: Manufacturing costs in February 1 beginning inventory: Variable Fixed Total Manufacturing costs in February: Variable Fixed Total Selling and administrative expenses in February: Variable Fixed Total Number of Units 25,000 25,000 Unit Cost 204,000 204,000 $265.00 34.00 $299.00 Total Cost 179,000 $265.00 $47,435,000 179,000 39.20 7,016,800 $304.20 $54,451,800 $6,625,000 850,000 $7,475,000 1.00 26.10 $5,324,400 204,000 27.10 $5,528,400 his information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions elow.

Income statements under absorption costing and variable costing Fresno Industries Inc. manufactures and sells high-quality camping tents. The company began operations on January 1 and operated at 100% of capacity (204,000 units) during the first month, creating an ending inventory of 25,000 units. During February, the company produced 179,000 units during the month but sold 204,000 units at $530 per unit. The February manufacturing costs and selling and administrative expenses were as follows: Manufacturing costs in February 1 beginning inventory: Variable Fixed Total Manufacturing costs in February: Variable Fixed Total Selling and administrative expenses in February: Variable Fixed Total Number of Units 25,000 25,000 Unit Cost 204,000 204,000 $265.00 34.00 $299.00 Total Cost 179,000 $265.00 $47,435,000 179,000 39.20 7,016,800 $304.20 $54,451,800 $6,625,000 850,000 $7,475,000 1.00 26.10 $5,324,400 204,000 27.10 $5,528,400 his information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions elow.

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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