Shawnee Motors Inc. assembles and sells MP3 players. The company began operations on August 1 and operated at 100% of capacity during the first month. The following data summarize the results for August: Sales (9,000 units) $990,000 Production costs (12,000 units): Direct materials $488,400 Direct labor 234,000 Variable factory overhead 117,600 Fixed factory overhead 78,000 918,000 Selling and administrative expenses: Variable selling and administrative expenses $142,300 Fixed selling and administrative expenses 55,100 197,400 If required, round interim per-unit calculations to the nearest cent. a. Prepare an income statement according to the absorption costing concept. Shawnee Motors Inc. Absorption Costing Income Statement For the Month Ended August 31 Sales $fill in the blank e871e4ff907af89_2 Cost of goods sold fill in the blank e871e4ff907af89_4 Gross profit $fill in the blank e871e4ff907af89_6 Selling and administrative expenses fill in the blank e871e4ff907af89_8 Income from operations $fill in the blank e871e4ff907af89_10 Feedback a. Under absorption costing, the cost of goods manufactured includes direct materials, direct labor, and factory overhead costs. Both fixed and variable factory costs are included as part of factory overhead. Learning Objective 1. b. Prepare an income statement according to the variable costing concept. Shawnee Motors Inc. Variable Costing Income Statement For the Month Ended August 31 Sales $fill in the blank 3ec83409000afe8_2 Variable cost of goods sold fill in the blank 3ec83409000afe8_4 Manufacturing margin $fill in the blank 3ec83409000afe8_6 Variable selling and administrative expenses fill in the blank 3ec83409000afe8_8 Contribution margin $fill in the blank 3ec83409000afe8_10 Fixed costs: Fixed factory overhead $fill in the blank 3ec83409000afe8_12 Fixed selling and administrative expenses fill in the blank 3ec83409000afe8_14 Total fixed costs fill in the blank 3ec83409000afe8_16 Income from operations $fill in the blank 3ec83409000afe8_18

Shawnee Motors Inc. assembles and sells MP3 players. The company began operations on August 1 and operated at 100% of capacity during the first month. The following data summarize the results for August: Sales (9,000 units) $990,000 Production costs (12,000 units): Direct materials $488,400 Direct labor 234,000 Variable factory overhead 117,600 Fixed factory overhead 78,000 918,000 Selling and administrative expenses: Variable selling and administrative expenses $142,300 Fixed selling and administrative expenses 55,100 197,400 If required, round interim per-unit calculations to the nearest cent. a. Prepare an income statement according to the absorption costing concept. Shawnee Motors Inc. Absorption Costing Income Statement For the Month Ended August 31 Sales $fill in the blank e871e4ff907af89_2 Cost of goods sold fill in the blank e871e4ff907af89_4 Gross profit $fill in the blank e871e4ff907af89_6 Selling and administrative expenses fill in the blank e871e4ff907af89_8 Income from operations $fill in the blank e871e4ff907af89_10 Feedback a. Under absorption costing, the cost of goods manufactured includes direct materials, direct labor, and factory overhead costs. Both fixed and variable factory costs are included as part of factory overhead. Learning Objective 1. b. Prepare an income statement according to the variable costing concept. Shawnee Motors Inc. Variable Costing Income Statement For the Month Ended August 31 Sales $fill in the blank 3ec83409000afe8_2 Variable cost of goods sold fill in the blank 3ec83409000afe8_4 Manufacturing margin $fill in the blank 3ec83409000afe8_6 Variable selling and administrative expenses fill in the blank 3ec83409000afe8_8 Contribution margin $fill in the blank 3ec83409000afe8_10 Fixed costs: Fixed factory overhead $fill in the blank 3ec83409000afe8_12 Fixed selling and administrative expenses fill in the blank 3ec83409000afe8_14 Total fixed costs fill in the blank 3ec83409000afe8_16 Income from operations $fill in the blank 3ec83409000afe8_18

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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Question

Income Statements under Absorption and Variable Costing

Sales (9,000 units)		$990,000
Production costs (12,000 units):
Direct materials	$488,400
Direct labor	234,000
Variable factory overhead	117,600
Fixed factory overhead	78,000		918,000
Selling and administrative expenses:
Variable selling and administrative expenses	$142,300
Fixed selling and administrative expenses	55,100		197,400

If required, round interim per-unit calculations to the nearest cent.

a. Prepare an income statement according to the absorption costing concept.

Shawnee Motors Inc.
Absorption Costing Income Statement
For the Month Ended August 31
Sales	$fill in the blank e871e4ff907af89_2
Cost of goods sold	fill in the blank e871e4ff907af89_4
Gross profit	$fill in the blank e871e4ff907af89_6
Selling and administrative expenses	fill in the blank e871e4ff907af89_8
Income from operations	$fill in the blank e871e4ff907af89_10

Feedback

a. Under absorption costing, the cost of goods manufactured includes direct materials, direct labor, and factory overhead costs. Both fixed and variable factory costs are included as part of factory overhead.

Learning Objective 1.

b. Prepare an income statement according to the variable costing concept.

Shawnee Motors Inc.
Variable Costing Income Statement
For the Month Ended August 31
Sales		$fill in the blank 3ec83409000afe8_2
Variable cost of goods sold		fill in the blank 3ec83409000afe8_4
Manufacturing margin		$fill in the blank 3ec83409000afe8_6
Variable selling and administrative expenses		fill in the blank 3ec83409000afe8_8
Contribution margin		$fill in the blank 3ec83409000afe8_10
Fixed costs:
Fixed factory overhead	$fill in the blank 3ec83409000afe8_12
Fixed selling and administrative expenses	fill in the blank 3ec83409000afe8_14
Total fixed costs		fill in the blank 3ec83409000afe8_16
Income from operations		$fill in the blank 3ec83409000afe8_18

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