me statement for the company under variable costing. TREZ Company Income Statement (Variable Costing) Denses T- $4,000,000
me statement for the company under variable costing. TREZ Company Income Statement (Variable Costing) Denses T- $4,000,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
2 part 2
![Trez Company began operations this year. During this year, the company produced 100,000 units and sold 80,000 units. The
absorption costing income statement for this year follows.
Income Statement (Absorption Costing)
Sales (80,000 units x $50 per unit)
Cost of goods sold
Gross profit
Selling and administrative expenses
Income
Additional Information
a. Selling and administrative expenses consist of $400,000 in annual fixed expenses and $2 per unit in variable selling and
administrative expenses.
b. The company's product cost of $30 per unit consists of the following.
Direct materials
Direct labor
Variable overhead
Fixed overhead ($600,000 / 100,000 units)
$ 4,000,000
2,400,000
1,600,000
560,000
$ 1,040,000
Sales
Less: Variable expenses
Required:
Prepare an income statement for the company under variable costing.
TREZ Company
Income Statement (Variable Costing)
$3 per unit
$18 per unit
$ 3 per unit
$6 per unit
$ 4,000,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff1799000-33ab-4b28-9bb2-f03cfa8defbf%2Fa20274c4-23ed-4d64-8c79-9200eb4c28a8%2Fqv4yua_processed.png&w=3840&q=75)
Transcribed Image Text:Trez Company began operations this year. During this year, the company produced 100,000 units and sold 80,000 units. The
absorption costing income statement for this year follows.
Income Statement (Absorption Costing)
Sales (80,000 units x $50 per unit)
Cost of goods sold
Gross profit
Selling and administrative expenses
Income
Additional Information
a. Selling and administrative expenses consist of $400,000 in annual fixed expenses and $2 per unit in variable selling and
administrative expenses.
b. The company's product cost of $30 per unit consists of the following.
Direct materials
Direct labor
Variable overhead
Fixed overhead ($600,000 / 100,000 units)
$ 4,000,000
2,400,000
1,600,000
560,000
$ 1,040,000
Sales
Less: Variable expenses
Required:
Prepare an income statement for the company under variable costing.
TREZ Company
Income Statement (Variable Costing)
$3 per unit
$18 per unit
$ 3 per unit
$6 per unit
$ 4,000,000
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