On June 30, the end of the first month of operations, Tudor Manufacturing Co. prepared the following income statement, based on the variable costing concept:Sales (100,000 units) $1,400,000Variable cost of goods sold: Variable cost of goods manufactured (120,000 units x $10 per unit)$1,200,000 Less ending inventory (20,000 units x $10 per unit)200,000 Variable cost of goods sold 1,000,000Manufacturing margin $400,000Variable selling and administrative expenses 15,000Contribution margin $385,000Fixed costs: Fixed manufacturing costs$18,000 Fixed selling and administrative expenses26,000 44,000Income from operations $341,000a. Prepare an absorption costing income statement. In your computations, round unit costs to two decimal places and round final answers to the nearest dollar.

Solution a: Computation of Unit Product Cost - Absorption Costing Particulars Per unit Unit…

Answered: On June 30, the end of the first month…

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

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On June 30, the end of the first month of operations, Tudor Manufacturing Co. prepared the following income statement, based on the variable costing concept:

Sales (100,000 units)			$1,400,000
Variable cost of goods sold:
	Variable cost of goods manufactured (120,000 units x $10 per unit)	$1,200,000
	Less ending inventory (20,000 units x $10 per unit)	200,000
	Variable cost of goods sold			1,000,000
Manufacturing margin			$400,000
Variable selling and administrative expenses			15,000
Contribution margin			$385,000
Fixed costs:
	Fixed manufacturing costs	$18,000
	Fixed selling and administrative expenses	26,000		44,000
Income from operations			$341,000

a. Prepare an absorption costing income statement. In your computations, round unit costs to two decimal places and round final answers to the nearest dollar.

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