Required 1Required 2Prepare an income statement for the year using absorption costing.SIMS COMPANYAbsorption Costing Income StatementNet income (loss) Sims Company, a manufacturer of tablet computers, began operations on January 1, 2019. Its cost and sales information for this yearfollows.Manufacturing costsDirect materials40 per unit60 per unit$Direct laborOverhead costs40 per unit(peryear)VariableFixed$6,300,000Selling and administrative costs for the yearVariable$725,000Fixed$4,750,000Production and sales for the yearUnits produced105,000 units75,000 units360 per unitUnits soldSales price per unit$1. Prepare an income statement for the year using variable costing.2. Prepare an income statement for the year using absorption costing.

Absorption costing is used to ascertain the cost per unit. In absorption costing, only production…

Sims Company, a manufacturer of tablet computers, began operations on January 1, 2019. Its cost and sales information for this year follows. Manufacturing costs 40 per unit 60 per unit Direct materials Direct labor Overhead costs Variable 40 per unit $6,300,000 (per year) Fixed Selling and administrative costs for the year Variable $ 725,000 $4,750,000 Fixed Production and sales for the year Units produced 105,000 units 75,000 units 360 per unit Units sold Sales price per unit $ 1. Prepare an income statement for the year using variable costing. 2. Prepare an income statement for the year using absorption costing.

Sims Company, a manufacturer of tablet computers, began operations on January 1, 2019. Its cost and sales information for this year follows. Manufacturing costs 40 per unit 60 per unit Direct materials Direct labor Overhead costs Variable 40 per unit $6,300,000 (per year) Fixed Selling and administrative costs for the year Variable $ 725,000 $4,750,000 Fixed Production and sales for the year Units produced 105,000 units 75,000 units 360 per unit Units sold Sales price per unit $ 1. Prepare an income statement for the year using variable costing. 2. Prepare an income statement for the year using absorption costing.

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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Concept explainers

Fringe Benefit Tax

Fringe benefits are in addition to the compensation that companies give to their employees. It is an additional benefit above the stated salary. It helps to keep the employees of the firm motivated as sometimes the only salary is not enough to retain the quality employees of the firm. There are different types of fringe benefits. Fringe benefits are given in both private as well as public enterprises.

Question

Required 1
Required 2
Prepare an income statement for the year using absorption costing.
SIMS COMPANY
Absorption Costing Income Statement
Net income (loss)

Sims Company, a manufacturer of tablet computers, began operations on January 1, 2019. Its cost and sales information for this year
follows.
Manufacturing costs
Direct materials
40 per unit
60 per unit
$
Direct labor
Overhead costs
40 per unit
(per
year)
Variable
Fixed
$6,300,000
Selling and administrative costs for the year
Variable
$
725,000
Fixed
$4,750,000
Production and sales for the year
Units produced
105,000 units
75,000 units
360 per unit
Units sold
Sales price per unit
$
1. Prepare an income statement for the year using variable costing.
2. Prepare an income statement for the year using absorption costing.

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Complete this question by entering your answers in the tabs below. Sims Company, a manufacturer of tablet computers, began operations on January 1, 2019. Its cost and sales information for this year follows. Manufacturing costs Direct materials $ 35 per unit Direct labor $ 55 per unit Overhead costs Variable $ 30 per unit Fixed $ 7,350,000 (per year) Selling and administrative costs for the year Variable $ 775,000 Fixed $ 4,500,000 Production and sales for the year Units produced 105,000 units Units sold 75,000 units Sales price per unit $ 360 per unit Required 1 Required 2 Prepare an income statement for the year using variable costing. SIMS COMPANY Variable Costing Income Statement Net income (loss)