Required 1Required 2Prepare an income statement for the year using absorption costing.SIMS COMPANYAbsorption Costing Income StatementNet income (loss) Sims Company, a manufacturer of tablet computers, began operations on January 1, 2019. Its cost and sales information for this yearfollows.Manufacturing costsDirect materials40 per unit60 per unit$Direct laborOverhead costs40 per unit(peryear)VariableFixed$6,300,000Selling and administrative costs for the yearVariable$725,000Fixed$4,750,000Production and sales for the yearUnits produced105,000 units75,000 units360 per unitUnits soldSales price per unit$1. Prepare an income statement for the year using variable costing.2. Prepare an income statement for the year using absorption costing.

Absorption costing is used to ascertain the cost per unit. In absorption costing, only production…

Sims Company, a manufacturer of tablet computers, began operations on January 1, 2019. Its cost and sales information for this year follows. Manufacturing costs 40 per unit 60 per unit Direct materials Direct labor Overhead costs Variable 40 per unit $6,300,000 (per year) Fixed Selling and administrative costs for the year Variable $ 725,000 $4,750,000 Fixed Production and sales for the year Units produced 105,000 units 75,000 units 360 per unit Units sold Sales price per unit $ 1. Prepare an income statement for the year using variable costing. 2. Prepare an income statement for the year using absorption costing.

Sims Company, a manufacturer of tablet computers, began operations on January 1, 2019. Its cost and sales information for this year follows. Manufacturing costs 40 per unit 60 per unit Direct materials Direct labor Overhead costs Variable 40 per unit $6,300,000 (per year) Fixed Selling and administrative costs for the year Variable $ 725,000 $4,750,000 Fixed Production and sales for the year Units produced 105,000 units 75,000 units 360 per unit Units sold Sales price per unit $ 1. Prepare an income statement for the year using variable costing. 2. Prepare an income statement for the year using absorption costing.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter6: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 2CMA

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