On January 1 of the current year, Townsend Co. commenced operations. It operated its plant at 100% of capacity during January. The following data summarized the results for January: Units Production 50,000 Sales ($18 per unit) (42,000) Inventory, January 31 8,000 Manufacturing costs: Variable $575,000 Fixed 80,000 Total $655,000 Selling and administrative expenses: Variable
On January 1 of the current year, Townsend Co. commenced operations. It operated its plant at 100% of capacity during January. The following data summarized the results for January: Units Production 50,000 Sales ($18 per unit) (42,000) Inventory, January 31 8,000 Manufacturing costs: Variable $575,000 Fixed 80,000 Total $655,000 Selling and administrative expenses: Variable
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
On January 1 of the current year, Townsend Co. commenced operations. It operated its plant at 100% of capacity during January. The following data summarized the results for January:
| Units | ||
| Production | 50,000 | |
| Sales ($18 per unit) | (42,000) | |
| Inventory, January 31 | 8,000 | |
| Variable | $575,000 | |
| Fixed | 80,000 | |
| Total | $655,000 | |
| Selling and administrative expenses: | ||
| Variable | $35,000 | |
| Fixed | 10,500 | |
| Total | $45,500 |
a. Prepare an income statement using absorption costing.
| Townsend Co. | ||
| Absorption Costing Income Statement | ||
| For the Month Ended January 31 | ||
| $fill in the blank cdb7fd038066009_2 | ||
| Cost of goods sold: | ||
| $fill in the blank cdb7fd038066009_4 | ||
| fill in the blank cdb7fd038066009_6 | ||
| fill in the blank cdb7fd038066009_8 | ||
| $fill in the blank cdb7fd038066009_10 | ||
| fill in the blank cdb7fd038066009_12 | ||
| Operating income | $fill in the blank cdb7fd038066009_13 |
b. Prepare an income statement using variable costing.
| Townsend Co. | ||
| Variable Costing Income Statement | ||
| For the Month Ended January 31 | ||
| $fill in the blank 661e69f6b07a03e_2 | ||
| Variable cost of goods sold: | ||
| $fill in the blank 661e69f6b07a03e_4 | ||
| fill in the blank 661e69f6b07a03e_6 | ||
| fill in the blank 661e69f6b07a03e_8 | ||
| $fill in the blank 661e69f6b07a03e_10 | ||
| fill in the blank 661e69f6b07a03e_12 | ||
| $fill in the blank 661e69f6b07a03e_14 | ||
| Fixed costs: | ||
| $fill in the blank 661e69f6b07a03e_16 | ||
| fill in the blank 661e69f6b07a03e_18 | fill in the blank 661e69f6b07a03e_19 | |
| Operating income | $fill in the blank 661e69f6b07a03e_20 |
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