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Kenzi Kayaking, a manufacturer of kayaks, began operations this year. During this first year, the company produced 1,025 kayaks an sold 775. at a price of $1,025 each. At this first year-end, the company reported the following income statement information using absorption costing. Sales (775 x $1,025) Cost of goods sold (775 x $475) Gross margin Selling and administrative expenses Net income Additional Information a. b. Production 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 $102,500 of fixed production costs allocated to the 1,025 kayaks produced. The $220,000 in selling and administrative expense consists of $85,000 that is variable and $135,000 that is fixed. Required 1. Prepare an income statement for the current year under variable costing. KENZI KAYAKING Variable Costing Income Statement. Net income (loss) $ 794,375 368,125 426,250 220,000 $206,250

Kenzi Kayaking, a manufacturer of kayaks, began operations this year. During this first year, the company produced 1,025 kayaks an sold 775. at a price of $1,025 each. At this first year-end, the company reported the following income statement information using absorption costing. Sales (775 x $1,025) Cost of goods sold (775 x $475) Gross margin Selling and administrative expenses Net income Additional Information a. b. Production 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 $102,500 of fixed production costs allocated to the 1,025 kayaks produced. The $220,000 in selling and administrative expense consists of $85,000 that is variable and $135,000 that is fixed. Required 1. Prepare an income statement for the current year under variable costing. KENZI KAYAKING Variable Costing Income Statement. Net income (loss) $ 794,375 368,125 426,250 220,000 $206,250

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter2: Basic Managerial Accounting Concepts
Section: Chapter Questions
Problem 58P: Cost of Goods Manufactured, Income Statement W. W. Phillips Company produced 4,000 leather recliners...
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Kenzi Kayaking, a manufacturer of kayaks, began operations this year. During this first year, the company produced 1,025 kayaks and sold 775. at a price of $1,025 each. At this first year-end, the company reported the following income statement information using absorption costing. Sales (775 x $1,025) Cost of goods sold (775 x $475) Gross margin Selling and administrative expenses Net income Additional Information a. b. Production 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 $102,500 of fixed production costs allocated to the 1,025 kayaks produced. The $220,000 in selling and administrative expense consists of $85,000 that is variable and $135,000 that is fixed. Required 1. Prepare an income statement for the current year under variable costing. KENZI KAYAKING Variable Costing Income Statement Net income (loss) $ $ 794,375 368,125 426,250 220,000 206,250
Transcribed Image Text:Kenzi Kayaking, a manufacturer of kayaks, began operations this year. During this first year, the company produced 1,025 kayaks and sold 775. at a price of $1,025 each. At this first year-end, the company reported the following income statement information using absorption costing. Sales (775 x $1,025) Cost of goods sold (775 x $475) Gross margin Selling and administrative expenses Net income Additional Information a. b. Production 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 $102,500 of fixed production costs allocated to the 1,025 kayaks produced. The $220,000 in selling and administrative expense consists of $85,000 that is variable and $135,000 that is fixed. Required 1. Prepare an income statement for the current year under variable costing. KENZI KAYAKING Variable Costing Income Statement Net income (loss) $ $ 794,375 368,125 426,250 220,000 206,250
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