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 $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 9631bb05c073fa8_2 Cost of goods sold: $fill in the blank 9631bb05c073fa8_4 fill in the blank 9631bb05c073fa8_6 fill in the blank 9631bb05c073fa8_8 $fill in the blank 9631bb05c073fa8_10 fill in the blank 9631bb05c073fa8_12 Operating income $fill in the blank 9631bb05c073fa8_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 ca886effcf80fff_2 Variable cost of goods sold: $fill in the blank ca886effcf80fff_4 fill in the blank ca886effcf80fff_6 fill in the blank ca886effcf80fff_8 $fill in the blank ca886effcf80fff_10 fill in the blank ca886effcf80fff_12 $fill in the blank ca886effcf80fff_14 Fixed costs: $fill in the blank ca886effcf80fff_16 fill in the blank ca886effcf80fff_18 fill in the blank ca886effcf80fff_19 Operating income $fill in the blank ca886effcf80fff_20

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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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

Manufacturing costs:
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 9631bb05c073fa8_2
Cost of goods sold:
	$fill in the blank 9631bb05c073fa8_4
	fill in the blank 9631bb05c073fa8_6
		fill in the blank 9631bb05c073fa8_8
		$fill in the blank 9631bb05c073fa8_10
		fill in the blank 9631bb05c073fa8_12
Operating income		$fill in the blank 9631bb05c073fa8_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 ca886effcf80fff_2
Variable cost of goods sold:
	$fill in the blank ca886effcf80fff_4
	fill in the blank ca886effcf80fff_6
		fill in the blank ca886effcf80fff_8
		$fill in the blank ca886effcf80fff_10
		fill in the blank ca886effcf80fff_12
		$fill in the blank ca886effcf80fff_14
Fixed costs:
	$fill in the blank ca886effcf80fff_16
	fill in the blank ca886effcf80fff_18	fill in the blank ca886effcf80fff_19
Operating income		$fill in the blank ca886effcf80fff_20

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