Problem 19-2A (Algo) Variable costing income statement LO P2 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 $45 per unit) Cost of goods sold Gross profit Selling and administrative expenses Income Additional Information $3,600,000 2,000,000 1,600,000 540,000 $ 1,060,000 a. Selling and administrative expenses consist of $400,000 in annual fixed expenses and $1.75 per unit in variable selling and administrative expenses. b. The company's product cost of $25 per unit consists of the following.
Problem 19-2A (Algo) Variable costing income statement LO P2 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 $45 per unit) Cost of goods sold Gross profit Selling and administrative expenses Income Additional Information $3,600,000 2,000,000 1,600,000 540,000 $ 1,060,000 a. Selling and administrative expenses consist of $400,000 in annual fixed expenses and $1.75 per unit in variable selling and administrative expenses. b. The company's product cost of $25 per unit consists of the following.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Problem 19-2A (Algo) Variable costing income statement LO P2
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 $45 per unit)
Cost of goods sold
Gross profit
Selling and administrative expenses
Income
$ 3,600,000
2,000,000
1,600,000
540,000
$ 1,060,000
Additional Information
a. Selling and administrative expenses consist of $400,000 in annual fixed expenses and $1.75 per unit in variable selling and
administrative expenses.
b. The company's product cost of $25 per unit consists of the following.
Direct materials
Direct labor
Variable overhead
Fixed overhead ($900,000 100,000 units)
Required:
$ 4 per unit
$8 per unit
$ 4 per unit
$9 per unit
Prepare an income statement for the company under variable costing.
TREZ Company
Income Statement (Variable Costing)
Sales
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