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 (163,000 units) during the first month, creating an ending inventory of 15,000 units. During February, the company produced 148,000 units during the month but sold 163,000 units at $520 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 15,000 $260.00 $3,900,000 Fixed 15,000 24.00 360,000 Total $284.00 $4,260,000 Manufacturing costs in February: Variable 148,000 $260.00 $38,480,000 Fixed 148,000 27.70 4,099,600 Total $287.70 $42,579,600 Selling and administrative expenses in February: Variable 163,000 $18.50 $3,015,500 Fixed 163,000 4.00 652,000 Total $22.50 $3,667,500 This 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. Open spreadsheet a. Prepare an income statement according to the absorption costing concept for the month ending February 28. Line Item Description Amount Amount $fill in the blank 3 Cost of goods sold: $fill in the blank 5 fill in the blank 7 fill in the blank 9 $fill in the blank 11 fill in the blank 13 $fill in the blank 15 b. Prepare an income statement according to the variable costing concept for the month ending February 28. Line Item Description Amount Amount $fill in the blank 17 fill in the blank 19 $fill in the blank 21 fill in the blank 23 $fill in the blank 25 Fixed costs: $fill in the blank 27 fill in the blank 29 fill in the blank 31

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 (163,000 units) during the first month, creating an ending inventory of 15,000 units. During February, the company produced 148,000 units during the month but sold 163,000 units at $520 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 15,000 $260.00 $3,900,000 Fixed 15,000 24.00 360,000 Total $284.00 $4,260,000 Manufacturing costs in February: Variable 148,000 $260.00 $38,480,000 Fixed 148,000 27.70 4,099,600 Total $287.70 $42,579,600 Selling and administrative expenses in February: Variable 163,000 $18.50 $3,015,500 Fixed 163,000 4.00 652,000 Total $22.50 $3,667,500 This 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. Open spreadsheet a. Prepare an income statement according to the absorption costing concept for the month ending February 28. Line Item Description Amount Amount $fill in the blank 3 Cost of goods sold: $fill in the blank 5 fill in the blank 7 fill in the blank 9 $fill in the blank 11 fill in the blank 13 $fill in the blank 15 b. Prepare an income statement according to the variable costing concept for the month ending February 28. Line Item Description Amount Amount $fill in the blank 17 fill in the blank 19 $fill in the blank 21 fill in the blank 23 $fill in the blank 25 Fixed costs: $fill in the blank 27 fill in the blank 29 fill in the blank 31

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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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 (163,000 units) during the first month, creating an ending inventory of 15,000 units. During February, the company produced 148,000 units during the month but sold 163,000 units at $520 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	15,000	$260.00	$3,900,000
Fixed	15,000	24.00	360,000
Total		$284.00	$4,260,000
Manufacturing costs in February:
Variable	148,000	$260.00	$38,480,000
Fixed	148,000	27.70	4,099,600
Total		$287.70	$42,579,600
Selling and administrative expenses in February:
Variable	163,000	$18.50	$3,015,500
Fixed	163,000	4.00	652,000
Total		$22.50	$3,667,500

This 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.

Open spreadsheet

a. Prepare an income statement according to the absorption costing concept for the month ending February 28.

Line Item Description	Amount	Amount
		$fill in the blank 3
Cost of goods sold:
	$fill in the blank 5
	fill in the blank 7
		fill in the blank 9
		$fill in the blank 11
		fill in the blank 13
		$fill in the blank 15

b. Prepare an income statement according to the variable costing concept for the month ending February 28.

Line Item Description	Amount	Amount
		$fill in the blank 17
		fill in the blank 19
		$fill in the blank 21
		fill in the blank 23
		$fill in the blank 25
Fixed costs:
	$fill in the blank 27
	fill in the blank 29
		fill in the blank 31

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