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Sam Darnold Company produces a single product called INT6, this company has provided the following data concerning its most recent month of operations: Selling price Units in begining inventory Units produced 119 370 6,420 6,330 Units sold Units in ending inventory Variable costs per unit: 460 Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative expense Fixed costs: %24 46 21 2 18 Fixed manufacturing overhead Fixed selling and administrative expense $141,240 $ 56,970 The company produces the same number of units every month, although the sales In units vary from month to month. The company's varlable costs per unit and total fixed costs have been constant from month to month. Requlred: a. Prepare a contribution format Income statement for the month using varlable costing. b. Prepare an Income statement for the month using absorption costing.

Sam Darnold Company produces a single product called INT6, this company has provided the following data concerning its most recent month of operations: Selling price Units in begining inventory Units produced 119 370 6,420 6,330 Units sold Units in ending inventory Variable costs per unit: 460 Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative expense Fixed costs: %24 46 21 2 18 Fixed manufacturing overhead Fixed selling and administrative expense $141,240 $ 56,970 The company produces the same number of units every month, although the sales In units vary from month to month. The company's varlable costs per unit and total fixed costs have been constant from month to month. Requlred: a. Prepare a contribution format Income statement for the month using varlable costing. b. Prepare an Income statement for the month using absorption costing.

FINANCIAL ACCOUNTING
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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### Sam Darnold Company Operational Data **Product Information:** - Selling Price per Unit: $119 **Production and Sales Data:** - Units in Beginning Inventory: 370 - Units Produced: 6,420 - Units Sold: 6,330 - Units in Ending Inventory: 460 **Variable Costs per Unit:** - Direct Materials: $42 - Direct Labor: $21 - Variable Manufacturing Overhead: $5 - Variable Selling and Administrative Expense: $2 **Fixed Costs:** - Fixed Manufacturing Overhead: $141,240 - Fixed Selling and Administrative Expense: $6,970 The company maintains a constant production rate each month, although sales fluctuate. Variable costs per unit and total fixed costs remain consistent. **Required Tasks:** a. Prepare a contribution format income statement for the month using variable costing. b. Prepare an income statement for the month using absorption costing. **Instructions:** You are to complete the contribution format income statement using the provided data by considering variable and fixed expenses separately. **Variable Costing Income Statement:** - **Variable Expenses:** - List all operational costs that vary with production volume. - **Fixed Expenses:** - Outline all costs that remain constant regardless of production changes. Use the tabs provided to input your calculated values for each section of the income statement. This exercise demonstrates the differences in profit calculation between variable and absorption costing methods.
Transcribed Image Text:### Sam Darnold Company Operational Data **Product Information:** - Selling Price per Unit: $119 **Production and Sales Data:** - Units in Beginning Inventory: 370 - Units Produced: 6,420 - Units Sold: 6,330 - Units in Ending Inventory: 460 **Variable Costs per Unit:** - Direct Materials: $42 - Direct Labor: $21 - Variable Manufacturing Overhead: $5 - Variable Selling and Administrative Expense: $2 **Fixed Costs:** - Fixed Manufacturing Overhead: $141,240 - Fixed Selling and Administrative Expense: $6,970 The company maintains a constant production rate each month, although sales fluctuate. Variable costs per unit and total fixed costs remain consistent. **Required Tasks:** a. Prepare a contribution format income statement for the month using variable costing. b. Prepare an income statement for the month using absorption costing. **Instructions:** You are to complete the contribution format income statement using the provided data by considering variable and fixed expenses separately. **Variable Costing Income Statement:** - **Variable Expenses:** - List all operational costs that vary with production volume. - **Fixed Expenses:** - Outline all costs that remain constant regardless of production changes. Use the tabs provided to input your calculated values for each section of the income statement. This exercise demonstrates the differences in profit calculation between variable and absorption costing methods.
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