Succulent Juice Corporation manufactures and sells premium tomato juice by the gallon. Succulent just finished its first year of operations. The following data relates to this first year: Number of gallons produced 75,000 Number of gallons sold 70,000 Selling price $ 3.00 per gallon Unit product cost under variable costing $ 1.45 per gallon Total contribution margin $ 84,000 Total fixed manufacturing overhead cost $ 63,000 Total fixed selling & administrative expense $ 10,500 Required: Using absorption costing, prepare Succulent Juice Corporation's income statement for the year.
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Succulent Juice Corporation manufactures and sells premium tomato juice by the gallon. Succulent just finished its first year of operations. The following data relates to this first year:
| Number of gallons produced | 75,000 | |
|---|---|---|
| Number of gallons sold | 70,000 | |
| Selling price | $ 3.00 | per gallon |
| Unit product cost under variable costing | $ 1.45 | per gallon |
| Total contribution margin | $ 84,000 | |
| Total fixed |
$ 63,000 | |
| Total fixed selling & administrative expense | $ 10,500 |
Required:
Using absorption costing, prepare Succulent Juice Corporation's income statement for the year.
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