Kenzi Kayaking, a manufacturer of kayaks, began operations this year. During this first year, the company produced 1,075 kayaks and sold 825. at a price of $1,075 each. At this first year-end, the company reported the following income statement information using absorption costing. Sales (825x Cost of goods sold (825x Gross margin Selling and administrative Net income $1,075) $475) expenses $ 8,86,875 3,91,875 4,95,000 2,10,000 $2,85,000 Additional Information a. Product cost per kayak totals $475, which consists of $375 in variable production cost and $100 in fixed production cost-the latter amount is based on $107,500 of fixed production costs allocated to the 1,075 kayaks produced. b. The $210,000 in selling and administrative expense consists of $75,000 that is variable and $135,000 that is fixed. Required 1. Prepare an income statement for the current year under variable costing.

Kenzi Kayaking, a manufacturer of kayaks, began operations this year. During this first year, the company produced 1,075 kayaks and sold 825. at a price of $1,075 each. At this first year-end, the company reported the following income statement information using absorption costing. Sales (825x Cost of goods sold (825x Gross margin Selling and administrative Net income $1,075) $475) expenses $ 8,86,875 3,91,875 4,95,000 2,10,000 $2,85,000 Additional Information a. Product cost per kayak totals $475, which consists of $375 in variable production cost and $100 in fixed production cost-the latter amount is based on $107,500 of fixed production costs allocated to the 1,075 kayaks produced. b. The $210,000 in selling and administrative expense consists of $75,000 that is variable and $135,000 that is fixed. Required 1. Prepare an income statement for the current year under variable costing.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter5: The Income Statement And The Statement Of Cash Flows

Section: Chapter Questions

Problem 2MC: The following information is available for Cooke Company for the current year: The gross margin is...

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