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Sims Company began operations on January 1. Its cost and sales information for this year follow. $ 40 per unit $ 60 per unit $ 30 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 $ 7,000,000 per year $ 11 per unit $ 4,500,000 per year 100,000 units 70,000 units $350 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 began operations on January 1. Its cost and sales information for this year follow. $ 40 per unit $ 60 per unit $ 30 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 $ 7,000,000 per year $ 11 per unit $ 4,500,000 per year 100,000 units 70,000 units $350 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
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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Sims Company began operations on January 1. Its cost and sales information for this year follow. $ 40 per unit $ 60 per unit $ 30 per unit $ 7,000,000 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 $ 4,500,000 per year 100,000 units 70,000 units $ 350 per unit 1. Prepare an income statement for the year using variable costing. 2. Prepare an income statement for the year using absorption costing.
Transcribed Image Text:Sims Company began operations on January 1. Its cost and sales information for this year follow. $ 40 per unit $ 60 per unit $ 30 per unit $ 7,000,000 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 $ 4,500,000 per year 100,000 units 70,000 units $ 350 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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