Race Track Motors assembles and sells motor vehicles and uses standard costing. Actual data relating to April and May 2020 are as follows: (Click the icon to view the data.) The selling price per vehicle is $28,000. The budgeted level of production used to calculate the budgeted fixed manufacturing cost per unit is 500 units. There are no price, efficiency, or spending variances. Any production-volume variance is written off to cost of goods sold in the month in which it occurs. Read the requirements. Requirement 1. Prepare April and May 2020 income statements for Race Track Motors under (a) variable costing and (b) absorption costing. (a) Prepare April and May 2020 income statements for Race Track Motors under variable costing. Complete the top half of the income statement for each month first, then complete the bottom portion. (Complete all input fields. Enter a "0" for any zero balance accounts.) April 2020 May 2020 $ 11,200,000 $ 15,400,000 Revenues Variable cost of goods sold: Beginning inventory Variable manufacturing costs Cost of goods available for sale Deduct ending inventory Variable cost of goods sold Variable operating costs Contribution margin $ 0 880,000 1,210,000 Data table A 1 2 3 4 5 Sales 6 Variable costs: 7 8 9 Fixed costs: 10 Manufacturing costs 11 Operating (marketing) costs Unit data: Beginning inventory Production Manufacturing cost per unit produced $ Operating (marketing) cost per unit sold Print B April Done 0 500 400 8,500 $ 2,200 C May 100 475 550 8,500 2,200 $ 2,400,000 $2,400,000 700,000 700,000 X
Race Track Motors assembles and sells motor vehicles and uses standard costing. Actual data relating to April and May 2020 are as follows: (Click the icon to view the data.) The selling price per vehicle is $28,000. The budgeted level of production used to calculate the budgeted fixed manufacturing cost per unit is 500 units. There are no price, efficiency, or spending variances. Any production-volume variance is written off to cost of goods sold in the month in which it occurs. Read the requirements. Requirement 1. Prepare April and May 2020 income statements for Race Track Motors under (a) variable costing and (b) absorption costing. (a) Prepare April and May 2020 income statements for Race Track Motors under variable costing. Complete the top half of the income statement for each month first, then complete the bottom portion. (Complete all input fields. Enter a "0" for any zero balance accounts.) April 2020 May 2020 $ 11,200,000 $ 15,400,000 Revenues Variable cost of goods sold: Beginning inventory Variable manufacturing costs Cost of goods available for sale Deduct ending inventory Variable cost of goods sold Variable operating costs Contribution margin $ 0 880,000 1,210,000 Data table A 1 2 3 4 5 Sales 6 Variable costs: 7 8 9 Fixed costs: 10 Manufacturing costs 11 Operating (marketing) costs Unit data: Beginning inventory Production Manufacturing cost per unit produced $ Operating (marketing) cost per unit sold Print B April Done 0 500 400 8,500 $ 2,200 C May 100 475 550 8,500 2,200 $ 2,400,000 $2,400,000 700,000 700,000 X
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Race Track Motors assembles and sells motor vehicles and uses standard costing. Actual data relating to April and May 2020 are as follows:
(Click the icon to view the data.)
The selling price per vehicle is $28,000. The budgeted level of production used to calculate the budgeted fixed manufacturing cost per unit is 500 units. There are no price, efficiency, or spending variances. Any production-volume variance is written off to cost of goods sold in the month in which it occurs.
Read the requirements.
Requirement 1. Prepare April and May 2020 income statements for Race Track Motors under (a) variable costing and (b) absorption costing.
(a) Prepare April and May 2020 income statements for Race Track Motors under variable costing. Complete the top half of the income statement for each month first, then complete the bottom portion. (Complete all input fields. Enter a "0" for any zero balance accounts.)
April 2020
May 2020
$ 11,200,000
$ 15,400,000
Revenues
Variable cost of goods sold:
Beginning inventory
Variable manufacturing costs
Cost of goods available for sale
Deduct ending inventory
Variable cost of goods sold
Variable operating costs
Contribution margin
$
0
880,000
1,210,000
Data table
A
1
2
3
4
5
Sales
6 Variable costs:
7
8
9
Fixed costs:
10
Manufacturing costs
11 Operating (marketing) costs
Unit data:
Beginning inventory
Production
Manufacturing cost per unit produced $
Operating (marketing) cost per unit sold
Print
B
April
Done
0
500
400
8,500 $
2,200
C
May
100
475
550
8,500
2,200
$ 2,400,000 $2,400,000
700,000
700,000
X
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