Simons Corp. has the following income statement under standard absorption costing AFTER disposing of variances: Sales $450,000 Cost of Goods sold: Standard cost of goods sold: beg. inv. $0 Production $400, 000 ending inv. $160,000 Standard cost of goods sold: $240,000 Adjust for variances 0 Adjusted Standard cost of goods sold: $240, 000 Gross Profit $210,000 Selling and Admin. expenses Variable selling and admin. $ 70,000 Fixed selling and admin. $ 80,000 Net income $ 60,000 During the period Simons produced 100,000 units and sold 60,000 units. Budgeted fixed factory overhead was $120,000. Actual fixed factory overhead equaled budgeted fixed factory overhead, yet overhead was overapplied by $80,000. There were no price, spending or efficiency variances, except for a direct labor price variance. Simons corp. prorates variances based on ending account balances. 1. Present a variable costing income statement. 2. If Simons Corp. does not prorate variances, what is net income under variable costing (you do not need to calculate or present an income statement).

Simons Corp. has the following income statement under standard absorption costing AFTER disposing of variances: Sales $450,000 Cost of Goods sold: Standard cost of goods sold: beg. inv. $0 Production $400, 000 ending inv. $160,000 Standard cost of goods sold: $240,000 Adjust for variances 0 Adjusted Standard cost of goods sold: $240, 000 Gross Profit $210,000 Selling and Admin. expenses Variable selling and admin. $ 70,000 Fixed selling and admin. $ 80,000 Net income $ 60,000 During the period Simons produced 100,000 units and sold 60,000 units. Budgeted fixed factory overhead was $120,000. Actual fixed factory overhead equaled budgeted fixed factory overhead, yet overhead was overapplied by $80,000. There were no price, spending or efficiency variances, except for a direct labor price variance. Simons corp. prorates variances based on ending account balances. 1. Present a variable costing income statement. 2. If Simons Corp. does not prorate variances, what is net income under variable costing (you do not need to calculate or present an income statement).

Name: Simons Corp. has the following income statement under standard absorp
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Description: Simons Corp. has the following income statement under standard absorption costing AFTERdisposing of variances: Sales $450,000 Cost of Goods sold: Standard cost of goods sold: beg.inv. $0 Production $400, 000 ending inv. $160,000 Standard cost of goo

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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