Sims Company began operations on January 1. Its cost and sales information for this year follow.$ 30 per unit$ 50 per unit$ 40 per unitDirect materialsDirect laborVariable overheadFixed overheadVariable selling and administrative expensesFixed selling and administrative expensesUnits producedUnits soldSales price$ 6,000,000 per year$ 11 per unit$ 4,000,000 per year100,000 units70,000 units$360 per unit1. 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

Name: Sims Company began operations on January 1. Its cost and sales inform
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Description: Sims Company began operations on January 1. Its cost and sales information for this year follow.$ 30 per unit$ 50 per unit$ 40 per unitDirect materialsDirect laborVariable overheadFixed overheadVariable selling and administrative expensesFixed selli

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Sims Company began operations on January 1. Its cost and sales information for this year follow. $30 per unit $ 50 per unit $ 40 per unit $ 6,000,000 per year $ 11 per unit $4,000,000 per year 100,000 units 70,000 units $360 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 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

Sims Company began operations on January 1. Its cost and sales information for this year follow. $30 per unit $ 50 per unit $ 40 per unit $ 6,000,000 per year $ 11 per unit $4,000,000 per year 100,000 units 70,000 units $360 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 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

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Concept explainers

Variance Analysis

In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.

Standard Costing

The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.

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Sims Company began operations on January 1. Its cost and sales information for this year follow.
$ 30 per unit
$ 50 per unit
$ 40 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
$ 6,000,000 per year
$ 11 per unit
$ 4,000,000 per year
100,000 units
70,000 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

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Step 2: Working for sales revenue

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Step 3: Working for selling and administrative expenses

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Step 4: Working for cost of goods sold under absorption costing

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Step 5: Working for cost of goods sold under variable costing

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