rez 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 \times $45 per unit) $ 3,600,000 Cost of goods sold 2,000,000 Gross profit 1,600,000 Selling and administrative expenses 580,000 Income $ 1,020,000 Additional Information Selling and administrative expenses consist of $400,000 in annual fixed expenses and $2.25 per unit in variable selling and administrative expenses. The company's product cost of $25 per unit consists of the following. Direct materials S 4 per unit Direct labor $ 10 per unit Variable overhead $ 2 per
rez 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 \times $45 per unit) $ 3,600,000 Cost of goods sold 2,000,000 Gross profit 1,600,000 Selling and administrative expenses 580,000 Income $ 1,020,000 Additional Information Selling and administrative expenses consist of $400,000 in annual fixed expenses and $2.25 per unit in variable selling and administrative expenses. The company's product cost of $25 per unit consists of the following. Direct materials S 4 per unit Direct labor $ 10 per unit Variable overhead $ 2 per
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![rez 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
\times $45 per unit) $ 3,600,000 Cost of goods sold 2,000,000 Gross profit
1,600,000 Selling and administrative expenses 580,000 Income $ 1,020,000
Additional Information Selling and administrative expenses consist of $400,000 in
annual fixed expenses and $2.25 per unit in variable selling and administrative
expenses. The company's product cost of $25 per unit consists of the following.
Direct materials $ 4 per unit Direct labor $10 per unit Variable overhead $ 2 per
unit Fixed overhead ($900,000 / 100,000 units) $ 9 per unit Required: Prepare an
income statement for the company under variable costing.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7a382c54-4dbe-4246-b2ad-38e9104e8ed0%2F85f2a39c-c6a3-400d-abbe-2865af52eaea%2Ft5k6e5s_processed.png&w=3840&q=75)
Transcribed Image Text:rez 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
\times $45 per unit) $ 3,600,000 Cost of goods sold 2,000,000 Gross profit
1,600,000 Selling and administrative expenses 580,000 Income $ 1,020,000
Additional Information Selling and administrative expenses consist of $400,000 in
annual fixed expenses and $2.25 per unit in variable selling and administrative
expenses. The company's product cost of $25 per unit consists of the following.
Direct materials $ 4 per unit Direct labor $10 per unit Variable overhead $ 2 per
unit Fixed overhead ($900,000 / 100,000 units) $ 9 per unit Required: Prepare an
income statement for the company under variable costing.
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