Sims Company began operations on January 1. Its cost and sales information for this year follow. $ 30 per unit $50 per unit $20 per unit $ 8,400,000 per year $ 11 per unit Direct materials Direct labor Variable overhead Fixed overhead Variable selling and administrative expenses Fixed selling and administrative expenses Units produced Units sold Sales price $4,750,000 per year 105,000 units 75,000 units 1. Prepare an income statement for the year using variable costing. 2. Prepare an income statement for the year using absorption costing. $ 350 per unit
Sims Company began operations on January 1. Its cost and sales information for this year follow. $ 30 per unit $50 per unit $20 per unit $ 8,400,000 per year $ 11 per unit Direct materials Direct labor Variable overhead Fixed overhead Variable selling and administrative expenses Fixed selling and administrative expenses Units produced Units sold Sales price $4,750,000 per year 105,000 units 75,000 units 1. Prepare an income statement for the year using variable costing. 2. Prepare an income statement for the year using absorption costing. $ 350 per unit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Sims Company began operations on January 1. Its cost and sales information for this year follow.
$ 30 per unit
$50 per unit
$20 per unit
$ 8,400,000 per year
$ 11 per unit
$4,750,000 per year
105,000 units
75,000 units
Direct materials
Direct labor
Variable overhead
Fixed overhead
Variable selling and administrative expenses
Fixed selling and administrative expenses
Units produced
Units sold
Sales price
1. Prepare an income statement for the year using variable costing.
2. Prepare an income statement for the year using absorption costing.
$ 350 per unit
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Step 1: Introduction
VIEWStep 2: Fixed Manufacturing OH Absorption Rate
VIEWStep 3: Cost of Goods Sold Under Absorption Costing
VIEWStep 4: Selling & Administrative Expenses Using Absorption Costing
VIEWStep 5: Variable Costing Income Statement
VIEWStep 6: Absorption Costing Income Statement
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