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Variable Costing Income Statement On July 31, the end of the first month of operations, Rhys Company prepared the following inceme statement, based en the aboorption cesting concept Sales (96,000 units) $4,440,000 Cost of goods sold: Cost of goods manufactured $3,120,000 Less ending inventory (24,000 units) 624.000 Cost of goods sold 2,496.000 Gross profit $1,944,000 Selling and administrative expenses 288.000 Income from operations $1,656,000 a. Prepare a variable costing income statement, assuming that the fixed manufacturing costs were $132,000 and the variable selling and administrative expenses were $115,200. In your computations, round unit costs to two decimal places and round final amewers to the nearest delar Rhys Company Income Statement-Variable Costing For the Month Ended July 31 Sales Variable cost of goods sold: Variable cost of goods manufactured v Less ending inventery Variable cost of goods sold Manufacturing margin Variable selling and administrative expenses Contribution margin Fixed costs: Fixed manufacturing costs Fixed selling and administrative expenses Income from operations Feedback POek My Wrk b. Reconcile the absorption costing income from operations of $1,656,000 with the variable costing income from operations determined in (a). Reconciliation of Absorption and Variable Costing Income Absorption costing income from operations Vanable costing Income from operations Difference

Variable Costing Income Statement On July 31, the end of the first month of operations, Rhys Company prepared the following inceme statement, based en the aboorption cesting concept Sales (96,000 units) $4,440,000 Cost of goods sold: Cost of goods manufactured $3,120,000 Less ending inventory (24,000 units) 624.000 Cost of goods sold 2,496.000 Gross profit $1,944,000 Selling and administrative expenses 288.000 Income from operations $1,656,000 a. Prepare a variable costing income statement, assuming that the fixed manufacturing costs were $132,000 and the variable selling and administrative expenses were $115,200. In your computations, round unit costs to two decimal places and round final amewers to the nearest delar Rhys Company Income Statement-Variable Costing For the Month Ended July 31 Sales Variable cost of goods sold: Variable cost of goods manufactured v Less ending inventery Variable cost of goods sold Manufacturing margin Variable selling and administrative expenses Contribution margin Fixed costs: Fixed manufacturing costs Fixed selling and administrative expenses Income from operations Feedback POek My Wrk b. Reconcile the absorption costing income from operations of $1,656,000 with the variable costing income from operations determined in (a). Reconciliation of Absorption and Variable Costing Income Absorption costing income from operations Vanable costing Income from operations Difference

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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all Youlube Maps GE News G Translate Q Moral Choices Tes... CengageNOWv2 .. Bb Home Page- PSY... 8.5" x 14" Tri eBook Variable Costing Income Statement On July 31, the end of the first month of operations, Rhys Company prepared the following income statement, based on the absorption costing concept: Sales (96,000 units) $4,440,000 Cost of goods sold: Cost of goods manufactured $3,120,000 Less ending inventory (24,000 units) 624,000 Cost of goods sold 2,496,000 Gross profit $1,944,000 Selling and administrative expenses 288,000 Income from operations $1,656,000 a. Prepare a variable costing income statement, assuming that the fixed manufacturing costs were $132,000 and the variable selling and administrative expenses were $115,200. In your computations, round unit costs to two decimal places and round final answers to the nearest dollar. Rhys Company Income Statement-Variable Costing For the Month Ended July 31 Sales V Variable cost of goods sold: Variable cost of goods manufactured Less ending inventory Variable cost of goods sold Manufacturing margin Variable selling and administrative expenses Contribution margin Fixed costs: Fixed manufacturing costs Fixed selling and administrative expenses Income from operations Feedback Check My Work b. Reconcile the absorption costing income from operations of $1,656,000 with the variable costing income from operations determined in (a). Reconciliation of Absorption and Variable Costing Income Absorption costing income from operations Variable costing income from operations Difference Feedback Check My Work Feedback Check My Work
Transcribed Image Text:all Youlube Maps GE News G Translate Q Moral Choices Tes... CengageNOWv2 .. Bb Home Page- PSY... 8.5" x 14" Tri eBook Variable Costing Income Statement On July 31, the end of the first month of operations, Rhys Company prepared the following income statement, based on the absorption costing concept: Sales (96,000 units) $4,440,000 Cost of goods sold: Cost of goods manufactured $3,120,000 Less ending inventory (24,000 units) 624,000 Cost of goods sold 2,496,000 Gross profit $1,944,000 Selling and administrative expenses 288,000 Income from operations $1,656,000 a. Prepare a variable costing income statement, assuming that the fixed manufacturing costs were $132,000 and the variable selling and administrative expenses were $115,200. In your computations, round unit costs to two decimal places and round final answers to the nearest dollar. Rhys Company Income Statement-Variable Costing For the Month Ended July 31 Sales V Variable cost of goods sold: Variable cost of goods manufactured Less ending inventory Variable cost of goods sold Manufacturing margin Variable selling and administrative expenses Contribution margin Fixed costs: Fixed manufacturing costs Fixed selling and administrative expenses Income from operations Feedback Check My Work b. Reconcile the absorption costing income from operations of $1,656,000 with the variable costing income from operations determined in (a). Reconciliation of Absorption and Variable Costing Income Absorption costing income from operations Variable costing income from operations Difference Feedback Check My Work Feedback Check My Work
Expert Solution
Step 1

The variable costing income statement is based on the contribution format where all the variable cost is deducted from sales. The fixed cost is deducted fully from contribution in order to determine the net profit. The fixed overheads are deferred on the units produced and valued the closing stock. Under absorption costing statement, the inventory is valued on variable manufacturing cost whereas the inventory is valued on total manufacturing cost.

 

 

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