Kenzi, a manufacturer of kayaks, began operations this year. During this year, the company produced 1,050 kayaks and sold 800 at a price of $1,050 each. At year-end, the company reported the following income statement information using absorption costing. Sales (800 x $1,050) Cost of goods sold (800 x $425) Gross profit Selling and administrative expenses Income Additional Information a. Product cost per kayak under absorption costing totals $425, which consists of $325 in direct materials, direct labor, and variable overhead costs and $100 in fixed overhead cost. Fixed overhead of $100 per unit is based on $105,000 of fixed overhead per year divided by 1,050 kayaks produced. b. The $250,000 in selling and administrative expenses consists of $95,000 that is variable and $155,000 that is fixed. Prepare an income statement for the current year under variable costing. Income KENZI $ 840,000 340,000 500,000 250,000 $ 250,000 Income Statement (Variable Costing)
Kenzi, a manufacturer of kayaks, began operations this year. During this year, the company produced 1,050 kayaks and sold 800 at a price of $1,050 each. At year-end, the company reported the following income statement information using absorption costing. Sales (800 x $1,050) Cost of goods sold (800 x $425) Gross profit Selling and administrative expenses Income Additional Information a. Product cost per kayak under absorption costing totals $425, which consists of $325 in direct materials, direct labor, and variable overhead costs and $100 in fixed overhead cost. Fixed overhead of $100 per unit is based on $105,000 of fixed overhead per year divided by 1,050 kayaks produced. b. The $250,000 in selling and administrative expenses consists of $95,000 that is variable and $155,000 that is fixed. Prepare an income statement for the current year under variable costing. Income KENZI $ 840,000 340,000 500,000 250,000 $ 250,000 Income Statement (Variable Costing)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Please avoid solution image based thanku
Transcribed Image Text:Kenzi, a manufacturer of kayaks, began operations this year. During this year, the company produced 1,050 kayaks and sold 800 at a
price of $1,050 each. At year-end, the company reported the following income statement information using absorption costing.
Sales (800 x $1,050)
Cost of goods sold (800 x $425)
Gross profit
Selling and administrative expenses
Income
Additional Information
a. Product cost per kayak under absorption costing totals $425, which consists of $325 in direct materials, direct labor, and variable
overhead costs and $100 in fixed overhead cost. Fixed overhead of $100 per unit is based on $105,000 of fixed overhead per
year divided by 1,050 kayaks produced.
b. The $250,000 in selling and administrative expenses consists of $95,000 that is variable and $155,000 that is fixed.
Prepare an income statement for the current year under variable costing.
Income
KENZI
$ 840,000
340,000
500,000
250,000
$ 250,000
Income Statement (Variable Costing)
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education