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

See similar textbooks

Similar questions

Two companies are expected to have annual sales of 1,000,000 decks of playing cards next year. Estimates for next year are presented below: Company 1 Company 2 Selling price per deck Cost of paper deck Printing ink per deck $ 3.00 0.62 0.13 $3.00 0.65 Labor per deck 0.75 0.15 1.25 Variable overhead per deck 0.30 0.35 Fixed costs $960.000 $252,000 Given these data, which of the following responses is correct? (In units) A B C. D. Breakeven point for Co. 1 533,334 533,334 800,000 800,000 Breakeven point for Co. 2 105,000 105.000 420.000 420,000 Volume at which profits of Co. 1 and Co. 2 are equal 1,000.000 1.180.000 1,000,000 1,180.000 None B A D C Data concerning NikNik Corporation's activity for the 6 months appear below: Machine Electrical Cost Hours January P3,120 February 4,460 March 3.500 April 5,040 May 2,900 June 3,200 4.000 6.000 4,800 5,800 3.600 4,200 Using the high-low method of analysis, estimate the variable electrical cost per machine hour (nearest centavo).
Sims Company, a manufacturer of tablet computers, began operations on January 1, 2019. Its cost and sales information for this year follows. Manufacturing costs $ 30 per unit Direct materials Direct labor $ 50 per unit Overhead costs Variable $ Fixed 40 per unit. $6,600,000 (per year) Selling and administrative costs for the year Variable Fixed $ 775,000 $5,000,000 Production and sales for the year Units produced 110,000 units Units sold Sales price per unit 80,000 units 360 per unit $ 1. Prepare an income statement for the year using variable costing. 2. Prepare an income statement for the year using absorption costing. Complete this question by entering your answers in the tabs below. Required 1 Required 2 O 21
Accounting Addidas sells shoes at $55 per pair. The following data are related to its 2022 operation: Items Year 2022 Sales 95,000 unit Beginning inventory 20,000 unit Production 85,500 unit Ending inventory 10,500 unit Variable manufacturing cost per unit $20 Fixed manufacturing overhead costs $2,000,000 per year Denominator machine hours 1800 Standard production rate 50 units per machine hour Variable operating expenses $5 per unit Fixed selling and administration expenses $100,000 per year Assumption: The standard cost per unit is same for units in beginning and unit produced during the year and no price, spending or efficiency variance. Required:a. Prepare income statements for year 2022 using absorption costing.b. Prepare income statements for year 2022 using variable costing.c. Explain why the income was different each year using the two methods.d. Explain why absorption costing has potential for leading to undesirable incentives for managers. Please answer all parts i cant post…
Rowe Tool and Die (RTD) produces metal fittings as a supplier to various manufacturing firms in the area. The following is the forecasted income statement for the next quarter, which is the typical planning horizon used at RTD. RTD expects to sell 47,000 units during the quarter. RTD carries no inventories. Sales revenue Costs of fitting produced Gross profit Administrative costs Operating profit Amount $ 1,250, 200 958, 800 $ 291,400 220,900 $ 70,500 Per Unit $ 26,60 20.40 $6.20 4.70 $ 1.50 Fixed costs included in this income statement are $305,500 for depreciation on plant and machinery and miscellaneous factory operations and $95,500 for administrative costs. RTD has received a request for 10,000 fittings to be produced in the next quarter from Endicott Manufacturing. Endicott has never purchased from RTD, although they have been a local company for many years. Endicott has offered to pay $20.20 per unit. RTD can easily produce the 10,000 units with its existing capacity. Production…
prepare income statement for month ended may 31st 2022 under absorption and variable costing
Super Bike Manufacturing Company presents the following data for year 2022: Opening inventory: 0 Units Sales: 8,000 Units Production: 10,000 Units • Closing inventory: 2,000 Units Direct materials: $240 • Direct labor: $280 • Variable manufacturing overhead expenses: $100 • Variable selling and administrative expenses: $40 • Fixed manufacturing overhead expenses: $1200,000 • Fixed selling and administrative expenses: $800,000 Required: Using the data given above, compute the unit product cost of one bike under: 1. absorption costing system. 2. variable costing system.
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)
The Hame Company manufactures trendy, good-looking, moderately priced umbrellas. The following data are for the year ended December 31, 2020: 100,000 units Beginning inventory, January 1, 2020 50,000 units Ending inventory, December 31, 2020 2020 Sales 400,000 units Selling price $25 per unit Variable manufacturing cost per unit, including direct materials $6 per unit Variable selling & admin. cost per unit sold S2 per unit sold Fixed manufacturing costs $1,625,000 Fixed selling & admin. costs $1,100,000 Required: Assume standard costs per unit are the same for units in beginning inventory and units produced during the year. Also, assume no price, spending, or efficiency variances. Prepare income statement under variable costing for the year ended December 31, 2020.