Prepare an income statement for Year 1, Year 2, and Year 3. Assume the company uses abs intermediate calculations to 2 decimal places.) Haas Company Absorption Costing Income Statement Year 1 Year 2 Year 3 Sales O $ 2,430,000 2,160,000 1,620,000 Cost of goods sold 1,980,000 O 1,440,000 O 2,475,000 X Gross margin 180,000 180,000 (45,000) Selling and administrative expenses 180,000 170,000 O 185,000 Net operating income (loss) $ $ 10,000 $ (230,000)
Prepare an income statement for Year 1, Year 2, and Year 3. Assume the company uses abs intermediate calculations to 2 decimal places.) Haas Company Absorption Costing Income Statement Year 1 Year 2 Year 3 Sales O $ 2,430,000 2,160,000 1,620,000 Cost of goods sold 1,980,000 O 1,440,000 O 2,475,000 X Gross margin 180,000 180,000 (45,000) Selling and administrative expenses 180,000 170,000 O 185,000 Net operating income (loss) $ $ 10,000 $ (230,000)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Problem 6-18 (Algo) Variable and Absorption Costing Unit Product Costs and Income Statements [LO6-1, LO6-2]
Haas Company manufactures and sells one product. The following information pertains to each of the company’s first three years of operations:
| Variable costs per unit: | ||
| Manufacturing: | ||
| Direct materials | $ | 24 |
| Direct labor | $ | 16 |
| Variable manufacturing |
$ | 4 |
| Variable selling and administrative | $ | 1 |
| Fixed costs per year: | ||
| Fixed manufacturing overhead | $ | 220,000 |
| Fixed selling and administrative expenses | $ | 140,000 |
During its first year of operations, Haas produced 40,000 units and sold 40,000 units. During its second year of operations, it produced 55,000 units and sold 30,000 units. In its third year, Haas produced 20,000 units and sold 45,000 units. The selling price of the company’s product is $54 per unit.
Required:
b. Prepare an income statement for Year 1, Year 2, and Year 3.
Transcribed Image Text:Req 1
Req 2A
Req 2B
Req 3A
Req 3B
Prepare an income statement for Year 1, Year 2, and Year 3. Assume the company uses absorption costing. (Round your
intermediate calculations to 2 decimal places.)
Haas Company
Absorption Costing Income Statement
Year 1
Year 2
Year 3
$
2,160,000
2$
1,620,000
$ 2,430,000
Sales
Cost of goods sold
1,980,000
1,440,000
2,475,000 X
Gross margin
180,000
180,000
(45,000)
Selling and administrative expenses
180,000
170,000
185,000
Net operating income (loss)
2$
2$
10,000
$ (230,000)
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