On January 1 of the current year, Townsend Co. commenced operations. It operated its plant at 100% of capacity during January The following data summarized the results for January: Production Sales ($18 per unit) Inventory, January 31 Manufacturing costs: Variable Fixed Total Selling and administrative expenses: Variable Fixed Total Units 50,000 (42,000) 8,000 $575,000 80,000 $655,000 $35,000 10,500 $45,500 a. Prepare an income statement using absorption costing. Townsend Co. Absorption Costing Income Statement For the Month Ended January 31 Line Item Description Amount Amount
On January 1 of the current year, Townsend Co. commenced operations. It operated its plant at 100% of capacity during January The following data summarized the results for January: Production Sales ($18 per unit) Inventory, January 31 Manufacturing costs: Variable Fixed Total Selling and administrative expenses: Variable Fixed Total Units 50,000 (42,000) 8,000 $575,000 80,000 $655,000 $35,000 10,500 $45,500 a. Prepare an income statement using absorption costing. Townsend Co. Absorption Costing Income Statement For the Month Ended January 31 Line Item Description Amount Amount
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter18: Pricing And Profitability Analysis
Section: Chapter Questions
Problem 3CE: Pattison Products, Inc., began operations in October and manufactured 40,000 units during the month...
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![On January 1 of the current year, Townsend Co. commenced operations. It operated its plant at 100% of capacity during January.
The following data summarized the results for January:
Production
Sales ($18 per unit)
Inventory, January 31
Manufacturing costs:
Variable
Fixed
Total
Selling and
administrative
expenses:
Variable
Fixed
Total
Cost of goods sold:
Units
50,000
(42,000)
8,000
Operating income
$575,000
80,000
$655,000
a. Prepare an income statement using absorption costing.
Townsend Co.
Absorption Costing Income Statement
For the Month Ended January 31
Line Item Description Amount Amount
$35,000
10,500
$45,500](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9f495d01-8e94-4a58-9c46-b1ef030cc39b%2F22ca0221-f560-48ab-bad9-b60aa0cb1855%2F59nipz_processed.png&w=3840&q=75)
Transcribed Image Text:On January 1 of the current year, Townsend Co. commenced operations. It operated its plant at 100% of capacity during January.
The following data summarized the results for January:
Production
Sales ($18 per unit)
Inventory, January 31
Manufacturing costs:
Variable
Fixed
Total
Selling and
administrative
expenses:
Variable
Fixed
Total
Cost of goods sold:
Units
50,000
(42,000)
8,000
Operating income
$575,000
80,000
$655,000
a. Prepare an income statement using absorption costing.
Townsend Co.
Absorption Costing Income Statement
For the Month Ended January 31
Line Item Description Amount Amount
$35,000
10,500
$45,500
![b. Prepare an income statement using variable costing.
Townsend Co.
Variable Costing Income Statement
For the Month Ended January 31
Line Item Description Amount Amount
Variable cost of goods sold:
Fixed costs:
Total fixed costs
Operating income
tA
tA
A
LA](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9f495d01-8e94-4a58-9c46-b1ef030cc39b%2F22ca0221-f560-48ab-bad9-b60aa0cb1855%2Fl5ki5cj_processed.png&w=3840&q=75)
Transcribed Image Text:b. Prepare an income statement using variable costing.
Townsend Co.
Variable Costing Income Statement
For the Month Ended January 31
Line Item Description Amount Amount
Variable cost of goods sold:
Fixed costs:
Total fixed costs
Operating income
tA
tA
A
LA
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