Absorption and Variable Costing Income Statements During the first month of operations ended July 31, YoSan Inc. manufactured 2,400 flat panel televisions, of which 2,000 were sold. Operating data for the month are summarized as follows: Line Item Description Amount Amount Sales $2,150,000 Manufacturing costs: Direct materials $960,000 Direct labor 420,000 Variable manufacturing cost 156,000 Fixed manufacturing cost 288,000 1,824,000 Selling and administrative expenses: Variable $204,000 Fixed 96,000 300,000 Required: Question Content Area 1. Prepare an income statement based on the absorption costing concept. YoSan Inc.Absorption Costing Income StatementFor the Month Ended July 31 Line Item Description Amount Amount - Cost of goods sold: $- Select - Question Content Area
Absorption and Variable Costing Income Statements During the first month of operations ended July 31, YoSan Inc. manufactured 2,400 flat panel televisions, of which 2,000 were sold. Operating data for the month are summarized as follows: Line Item Description Amount Amount Sales $2,150,000 Manufacturing costs: Direct materials $960,000 Direct labor 420,000 Variable manufacturing cost 156,000 Fixed manufacturing cost 288,000 1,824,000 Selling and administrative expenses: Variable $204,000 Fixed 96,000 300,000 Required: Question Content Area 1. Prepare an income statement based on the absorption costing concept. YoSan Inc.Absorption Costing Income StatementFor the Month Ended July 31 Line Item Description Amount Amount - Cost of goods sold: $- Select - Question Content Area
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter7: Variable Costing For Management
analysis
Section: Chapter Questions
Problem 1PB: Absorption and variable costing income statements During the first month of operations ended July...
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Absorption and Variable Costing Income Statements
During the first month of operations ended July 31, YoSan Inc. manufactured 2,400 flat panel televisions, of which 2,000 were sold. Operating data for the month are summarized as follows:
Line Item Description | Amount | Amount |
---|---|---|
Sales | $2,150,000 | |
Direct materials | $960,000 | |
Direct labor | 420,000 | |
Variable manufacturing cost | 156,000 | |
Fixed manufacturing cost | 288,000 | 1,824,000 |
Selling and administrative expenses: | ||
Variable | $204,000 | |
Fixed | 96,000 | 300,000 |
Required:
Question Content Area
1. Prepare an income statement based on the absorption costing concept.
Line Item Description | Amount | Amount | |
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Cost of goods sold: | |||
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$- Select - |
Question Content Area
2. Prepare an income statement based on the variable costing concept.
Line Item Description | Amount | Amount |
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Variable cost of goods sold: | ||
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Fixed costs: | ||
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Question Content Area
3. Explain the reason for the difference in the amount of operating income reported in (1) and (2).
The operating income reported under costing exceeds the operating income reported under
costing, due to manufacturing costs that are deferred to a future month under costing.
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