T3-1 Variable costing income statement Following is Hartzberg's latest income statement. The company produced and sold 100,000 units during the year. Sales (100,000 units at $50) $ 5,000,000 Cost of goods sold: Direct material $1,500,000 Direct labor 800,000 Variable manufacturing overhead 300,000 Fixed manufacturing overhead 1,200,000 Total cost of goods sold 3,800,000 Gross profit 1,200,000 Selling expenses: Variable 200,000 Fixed 700,000 Total selling expenses 900,000 Operating income $ 300,000 Required Restate the income statement in contribution margin format, as if Hartzburg had used a variable costing system to report income.
T3-1 Variable costing income statement Following is Hartzberg's latest income statement. The company produced and sold 100,000 units during the year. Sales (100,000 units at $50) $ 5,000,000 Cost of goods sold: Direct material $1,500,000 Direct labor 800,000 Variable manufacturing overhead 300,000 Fixed manufacturing overhead 1,200,000 Total cost of goods sold 3,800,000 Gross profit 1,200,000 Selling expenses: Variable 200,000 Fixed 700,000 Total selling expenses 900,000 Operating income $ 300,000 Required Restate the income statement in contribution margin format, as if Hartzburg had used a variable costing system to report income.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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T3-1 Variable costing income statement Following is Hartzberg's latest income statement. The company produced and sold 100,000 units during the year.
| Sales (100,000 units at $50) |
$ 5,000,000
|
|
| Cost of goods sold: | ||
| Direct material |
$1,500,000
|
|
| Direct labor |
800,000
|
|
| Variable manufacturing overhead |
300,000
|
|
| Fixed manufacturing overhead |
1,200,000
|
|
| Total cost of goods sold |
3,800,000
|
|
| Gross profit |
1,200,000
|
|
| Selling expenses: | ||
| Variable |
200,000
|
|
| Fixed |
700,000
|
|
| Total selling expenses |
900,000
|
|
| Operating income |
$ 300,000
|
Required
Restate the income statement in contribution margin format, as if Hartzburg had used a variable costing system to report income.
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