Review the income statements on the Absorption Statement and Variable Statement panels, then complete the following table. The company’s sales price per unit is $75.00, and the number of units in ending inventory is 5,000. Item Amount Number of units sold Variable sales and administrative cost per unit Number of units manufactured Variable cost of goods manufactured per unit Fixed manufacturing cost per unit Saxon, Inc. Absorption Costing Income Statement For the Year Ended December 31 1 Sales $1,125,000.00 2 Cost of goods sold: 3 Beginning inventory $0.00 4 Cost of goods manufactured 840,000.00 5 Ending inventory (210,000.00) 6 Total cost of goods sold 630,000.00 7 Gross profit $495,000.00 8 Selling and administrative expenses 275,000.00 9 Income from operations $220,000.00 Saxon, Inc. Variable Costing Income Statement For the Year Ended December 31 1 Sales $1,125,000.00 2 Variable cost of goods sold: 3 Beginning inventory $0.00 4 Variable cost of goods manufactured 600,000.00 5 Ending inventory (150,000.00) 6 Total variable cost of goods sold 450,000.00 7 Manufacturing margin $675,000.00 8 Variable selling and administrative expenses 210,000.00 9 Contribution margin $465,000.00 10 Fixed costs: 11 Fixed manufacturing costs $240,000.00 12 Fixed selling and administrative expenses 65,000.00 13 Total fixed costs 305,000.00 14 Income from operations $160,000.00
Review the income statements on the Absorption Statement and Variable Statement panels, then complete the following table. The company’s sales price per unit is $75.00, and the number of units in ending inventory is 5,000. Item Amount Number of units sold Variable sales and administrative cost per unit Number of units manufactured Variable cost of goods manufactured per unit Fixed manufacturing cost per unit Saxon, Inc. Absorption Costing Income Statement For the Year Ended December 31 1 Sales $1,125,000.00 2 Cost of goods sold: 3 Beginning inventory $0.00 4 Cost of goods manufactured 840,000.00 5 Ending inventory (210,000.00) 6 Total cost of goods sold 630,000.00 7 Gross profit $495,000.00 8 Selling and administrative expenses 275,000.00 9 Income from operations $220,000.00 Saxon, Inc. Variable Costing Income Statement For the Year Ended December 31 1 Sales $1,125,000.00 2 Variable cost of goods sold: 3 Beginning inventory $0.00 4 Variable cost of goods manufactured 600,000.00 5 Ending inventory (150,000.00) 6 Total variable cost of goods sold 450,000.00 7 Manufacturing margin $675,000.00 8 Variable selling and administrative expenses 210,000.00 9 Contribution margin $465,000.00 10 Fixed costs: 11 Fixed manufacturing costs $240,000.00 12 Fixed selling and administrative expenses 65,000.00 13 Total fixed costs 305,000.00 14 Income from operations $160,000.00
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter3: Cost Behavior And Cost Forecasting
Section: Chapter Questions
Problem 54E: Income Statements under Absorption and Variable Costing In the coming year, Kalling Company expects...
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Question
Review the income statements on the Absorption Statement and Variable Statement panels, then complete the following table. The company’s sales price per unit is $75.00, and the number of units in ending inventory is 5,000.
Item
|
Amount
|
Number of units sold |
|
Variable sales and administrative cost per unit |
|
Number of units manufactured |
|
Variable cost of goods manufactured per unit |
|
Fixed manufacturing cost per unit |
|
Saxon, Inc.
|
Absorption Costing Income Statement
|
For the Year Ended December 31
|
1
|
Sales
|
|
$1,125,000.00
|
2
|
Cost of goods sold:
|
|
|
3
|
Beginning inventory
|
$0.00
|
|
4
|
Cost of goods manufactured
|
840,000.00
|
|
5
|
Ending inventory
|
(210,000.00)
|
|
6
|
Total cost of goods sold
|
|
630,000.00
|
7
|
Gross profit
|
|
$495,000.00
|
8
|
Selling and administrative expenses
|
|
275,000.00
|
9
|
Income from operations
|
|
$220,000.00
|
Saxon, Inc.
|
Variable Costing Income Statement
|
For the Year Ended December 31
|
1
|
Sales
|
|
$1,125,000.00
|
2
|
Variable cost of goods sold:
|
|
|
3
|
Beginning inventory
|
$0.00
|
|
4
|
Variable cost of goods manufactured
|
600,000.00
|
|
5
|
Ending inventory
|
(150,000.00)
|
|
6
|
Total variable cost of goods sold
|
|
450,000.00
|
7
|
Manufacturing margin
|
|
$675,000.00
|
8
|
Variable selling and administrative expenses
|
|
210,000.00
|
9
|
Contribution margin
|
|
$465,000.00
|
10
|
Fixed costs:
|
|
|
11
|
Fixed
|
$240,000.00
|
|
12
|
Fixed selling and administrative expenses
|
65,000.00
|
|
13
|
Total fixed costs
|
|
305,000.00
|
14
|
Income from operations
|
|
$160,000.00
|
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