Thomas Company produces a single product. Operating data for the company and its absorption costing income statement for the last year are presented below. Units in beginning inventory Units produced Units sold Sales Less: Cost of goods sold: Beginning inventory Add: Cost of goods manufactured 0 9,000 8,000 $ 80,000 0 $ 54,000 Goods available for sale $ 54,000 Less: Ending inventory $ 6,000 Cost of goods sold $ 48,000 Gross margin $ 32,000 Less: Selling and admin. expenses $ 28,000 Net operating income $ 4,000 Variable manufacturing costs are $4 per unit. Fixed manufacturing overhead totals $18,000 for the year. The fixed manufacturing overhead was applied at a rate of $2 per unit. Variable selling and administrative expenses were $1 per unit sold. Required: Prepare a new income statement for the year using variable costing.

Thomas Company produces a single product. Operating data for the company and its absorption costing income statement for the last year are presented below. Units in beginning inventory Units produced Units sold Sales Less: Cost of goods sold: Beginning inventory Add: Cost of goods manufactured 0 9,000 8,000 $ 80,000 0 $ 54,000 Goods available for sale $ 54,000 Less: Ending inventory $ 6,000 Cost of goods sold $ 48,000 Gross margin $ 32,000 Less: Selling and admin. expenses $ 28,000 Net operating income $ 4,000 Variable manufacturing costs are $4 per unit. Fixed manufacturing overhead totals $18,000 for the year. The fixed manufacturing overhead was applied at a rate of $2 per unit. Variable selling and administrative expenses were $1 per unit sold. Required: Prepare a new income statement for the year using variable costing.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter7: Inventories: Cost Measurement And Flow Assumptions

Section: Chapter Questions

Problem 15E: Habicht Company was formed in 2018 to produce a single product. The production and sales for the...

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