During the first month of operations ended August 31, Kodiak Fridgeration Company manufactured 80,000 mini refrigerators, of which 72,000 were sold. Operating data for the month are summarized as follows: 1 Sales $10,800,000.00 2 Manufacturing costs: 3 Direct materials $6,400,000.00 4 Direct labor 1,600,000.00 5 Variable manufacturing cost 1,280,000.00 6 Fixed manufacturing cost 320,000.00 9,600,000.00 7 Selling and administrative expenses: 8 Variable $1,080,000.00 9 Fixed 180,000.00 1,260,000.00 Required: 1. Prepare an income statement based on the absorption costing concept.* 2. Prepare an income statement based on the variable costing concept.* 3. Explain the reason for the difference in the amount of operating income reported in (1) and (2). *Be sure to complete the statement heading. Refer to the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. A colon (:) will automatically appear if it is required. Enter amounts as positive numbers unless the amount is a calculation that results in a negative amount. For example: Net loss should be negative.
During the first month of operations ended August 31, Kodiak Fridgeration Company manufactured 80,000 mini refrigerators, of which 72,000 were sold. Operating data for the month are summarized as follows: 1 Sales $10,800,000.00 2 Manufacturing costs: 3 Direct materials $6,400,000.00 4 Direct labor 1,600,000.00 5 Variable manufacturing cost 1,280,000.00 6 Fixed manufacturing cost 320,000.00 9,600,000.00 7 Selling and administrative expenses: 8 Variable $1,080,000.00 9 Fixed 180,000.00 1,260,000.00 Required: 1. Prepare an income statement based on the absorption costing concept.* 2. Prepare an income statement based on the variable costing concept.* 3. Explain the reason for the difference in the amount of operating income reported in (1) and (2). *Be sure to complete the statement heading. Refer to the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. A colon (:) will automatically appear if it is required. Enter amounts as positive numbers unless the amount is a calculation that results in a negative amount. For example: Net loss should be negative.
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter5: Process Cost Accounting—general Procedures
Section: Chapter Questions
Problem 8E: Argo Manufacturing Co. had 500 units, three-fifths completed, in process at the beginning of the...
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Question
During the first month of operations ended August 31, Kodiak Fridgeration Company manufactured 80,000 mini refrigerators, of which 72,000 were sold. Operating data for the month are summarized as follows:
1
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Sales
|
|
$10,800,000.00
|
2
|
|
|
|
3
|
Direct materials
|
$6,400,000.00
|
|
4
|
Direct labor
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1,600,000.00
|
|
5
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Variable manufacturing cost
|
1,280,000.00
|
|
6
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Fixed manufacturing cost
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320,000.00
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9,600,000.00
|
7
|
Selling and administrative expenses:
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|
|
8
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Variable
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$1,080,000.00
|
|
9
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Fixed
|
180,000.00
|
1,260,000.00
|
Required: | |||
1. | Prepare an income statement based on the absorption costing concept.* | ||
2. | Prepare an income statement based on the variable costing concept.* | ||
3. | Explain the reason for the difference in the amount of operating income reported in (1) and (2).
|
X
Labels and Amount Descriptions
Labels | |
August 31 | |
Cost of goods sold | |
Fixed costs | |
For the Month Ended August 31 | |
Variable cost of goods sold | |
Amount Descriptions | |
Contribution margin | |
Contribution margin ratio | |
Cost of goods manufactured | |
Fixed manufacturing costs | |
Fixed selling and administrative expenses | |
Gross profit | |
Operating income | |
Inventory, August 31 | |
Loss from operations | |
Manufacturing margin | |
Planned contribution margin | |
Sales | |
Sales mix | |
Selling and administrative expenses | |
Total cost of goods sold | |
Total fixed costs | |
Total variable cost of goods sold | |
Variable cost of goods manufactured | |
Variable selling and administrative expenses |
X
Variable Costing Income Statement
Shaded cells have feedback.
2. Prepare an income statement based on the variable costing concept. Be sure to complete the statement heading. Refer to the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. A colon (:) will automatically appear if it is required. Enter amounts as positive numbers unless the amount is a calculation that results in a negative amount. For example: Net loss should be negative.
Score: 98/102
Kodiak Fridgeration Company
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Variable Costing Income Statement
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