cation ProblemsCheck my work mode: This shows what is correct or incorrect for the work you havRequired informationLEHIGHTON CHALK COMPANYIncome StatementSales revenueCost of goods sold:Beginning finished-goods inventoryCost of goods manufacturedCost of goods available for saleEnding finished-goods inventoryCost of goods soldVariable selling and administrative costsTotal variable costs:Contribution marginFixed costs:Fixed manufacturing costsFixed selling and administrative expensesTotal fixed costsOperating incomeNOV>››› ›››$✓ $✓$✓$$✓$$$Year 165,000Required 102,50065,000$0 $ 2,5000 $< PrevSaved$$tvYear 265,0000 $65,000 $ 65,0002,5000✓0$ 65,0000Pequired 31 of 1MacBook ProNextalı Lehighton Chalk Company manufactures sidewalk chalk, which it sells online by the box at $25 per unit. Lehighton usesan actual costing system, which means that the actual costs of direct material, direct labor, and manufacturing overheadare entered into work-in-process inventory. The actual application rate for manufacturing overhead is computed eachyear; actual manufacturing overhead is divided by actual production (in units) to compute the application rate. Informationfor Lehighton's first two years of operation is as follows:Sales (in units)Production (in units)Production costs:Variable manufacturing costsFixed manufacturing overheadSelling and administrative costs:VariableFixedBased on absorption costingFinished-goods inventoryRetained earningsBased on variable costingFinished-goods inventoryRetained earningsNOVYear 12,6003,100$15,50018,600$ 5,50011,10010,4009,400Selected information from Lehighton's year-end balance sheets for its first two years of operation is as follows:LEHIGHTON CHALK COMPANYSelected Balance Sheet InformationEnd of Year 1End of Year 1$ 2,5008,100Year 22,6002,100< Prev$10,50018,60010,4009,400End of Year 2$ 019,000End of Year 2$019,0001 of 1#‒‒‒Next >

Lets understand the basics. Income statement is prepared under two method which are, (1) Variable costing method (2) Absorption costing method In variable costing method, product cost is calculated by adding all the variable manufacturing costs into consideration. All other costs are charged in the period in which it is incurred. On other hand in absorption costing, product cost is calculated by adding all the variable and fixed manufacturing costs into consideration. All other costs are charged in the period in which it is incurred. So here in this case, LEHIGHTON CHALK COMPANY Income Statement Year 1 Year 2 Sales revenue 65,000 65,000 Cost of goods sold: Beginning finished goods inventory 0 2,500 Cost of goods manufactured 15,500 10,500 Cost of goods available for sale 15,500 13,000 Ending finished goods inventory 2,500 0 Cost of goods sold 13,000 13,000 Variable selling and administrative costs 10,400 10,400 Contribution margin 41,600 41,600 Fixed costs: Fixed manufacturing costs 18,600 18,600 Fixed selling and administrative costs 9,400 9,400 Total fixed costs 28,000 28,000 Operating income 136,00 13,600 Formula for calculation:- LEHIGHTON CHALK COMPANY Income Statement Year 1 Year 2 Sales revenue (A) = 2,600 * $25 = 2,600 * $25 Cost of goods sold: Beginning finished goods inventory (B) Given Given Cost of goods manufactured (C) Given Given Cost of goods available for sale (D) = (B+C) Ending finished goods inventory (E) Given Given Cost of goods sold (F) = (D-E) Variable selling and administrative costs (G) Given Given Contribution margin (H) = (A-F-G) Fixed costs: Fixed manufacturing costs (I) Given Given Fixed selling and administrative costs (J) Given Given Total fixed costs (K) = (I+J) Operating income (L) = (H - K)

Business

Accounting

Lehighton Chalk Company manufactures sidewalk chalk, which it sells online by the box at $25 per unit. Lehighton use an actual costing system, which means that the actual costs of direct material, direct labor, and manufacturing overheac are entered into work-in-process inventory. The actual application rate for manufacturing overhead is computed each year; actual manufacturing overhead is divided by actual production (in units) to compute the application rate. Informati- for Lehighton's first two years of operation is as follows: Sales (in units) Production (in units) Production costs: Variable manufacturing costs Fixed manufacturing overhead Selling and administrative costs: Variable Fixed Year 1 2,600 3,100 $15,500 18,600 10,400 9,400 Year 2 2,600 2,100 $10,500 18,600 10,400 9,400 Selected information from Lehighton's year-end balance sheets for its first two years of operation is as follows:

Lehighton Chalk Company manufactures sidewalk chalk, which it sells online by the box at $25 per unit. Lehighton use an actual costing system, which means that the actual costs of direct material, direct labor, and manufacturing overheac are entered into work-in-process inventory. The actual application rate for manufacturing overhead is computed each year; actual manufacturing overhead is divided by actual production (in units) to compute the application rate. Informati- for Lehighton's first two years of operation is as follows: Sales (in units) Production (in units) Production costs: Variable manufacturing costs Fixed manufacturing overhead Selling and administrative costs: Variable Fixed Year 1 2,600 3,100 $15,500 18,600 10,400 9,400 Year 2 2,600 2,100 $10,500 18,600 10,400 9,400 Selected information from Lehighton's year-end balance sheets for its first two years of operation is as follows:

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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