Sims Company, a manufacturer of tablet computers, began operations on January 1, 2019. Its cost and sales information for this yearfollows.Manufacturing costsDirect materials35 per unit55 per unitDirect laborOverhead costsVariable20 per unit(peryear)Fixed$8,400,000Selling and administrative costs for the yearVariable750,000$4,500,000FixedProduction and sales for the yearUnits produced105,000 units75,000 units360 per unitUnits soldSales price per unit1. Prepare an income statement for the year using variable costing.2. Prepare an income statement for the year using absorption costing.Complete this question by entering your answers in the tabs below.Required 1Required 2Prepare an income statement for the year using variable costing.SIMS COMPANYVariable Costing Income Statement 1. Prepare an income statement for the year using variable costing.2. Prepare an income statement for the year using absorption costing.Complete this question by entering your answers in the tabs below.Required 1Required 2Prepare an income statement for the year using variable costing.SIMS COMPANYVariable Costing Income StatementNet income (loss)< Required 1Required 2 >

Sales revenue = 75,000 shares x $360 = $27,000,000

Sims Company, a manufacturer of tablet computers, began operations on January 1, 2019. Its cost and sales information for this year follows. Manufacturing costs Direct materials 35 per unit 55 per unit 2$ Direct labor Overhead costs Variable 20 per unit (per year) $ Fixed $৪,400,000 Selling and administrative costs for the year Variable $ 750,000 $4,500,000 Fixed Production and sales for the year Units produced Units sold 105,000 units 75,000 units 360 per unit 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 Direct materials 35 per unit 55 per unit 2$ Direct labor Overhead costs Variable 20 per unit (per year) $ Fixed $৪,400,000 Selling and administrative costs for the year Variable $ 750,000 $4,500,000 Fixed Production and sales for the year Units produced Units sold 105,000 units 75,000 units 360 per unit 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.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 22E: Ellerson Company provided the following information for the last calendar year: During the year,...

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Park and West, LLC, provides consulting services to retail merchandisers in the Midwest. In 2019, they generated $720,000 in service revenue. Their total cost (fixed and variable) per client was $2,500 and they served 115 clients during the year. If operating expenses for the year were $302,000 what was their net income?
Self-Construction Olson Machine Company manufactures small and large milling machines. Selling prices of these machines range from 35,000 to 200,000. During the 5-month period from August 1, 2019, through December 31, 2019, Olson manufactured a milling machine for its own use. This machine was built as part of the regular production activities. The project required a large amount of time front planning and supervisory personnel, as well as that of some of the companys officers, because it was a more sophisticated type of machine than the regular production models. Throughout the 5-month period, Olson charged all costs directly associated with the construction of the machine to a special account entitled Asset Construction Account. An analysis of the charges to this account as of December 31, 2019, follows: Olson allocates factory overhead to normal production as a percent of direct labor dollars as follows: Olson uses a flat rate of 40% of direct labor dollars to allocate general and administrative overhead. During the machine testing period, a cutter head malfunctioned and did extensive damage to the machine table and one cutter housing. This damage was not anticipated and was the result of an error in the assembly operation. Although no additional raw materials were needed to make the machine operational after the accident, the following labor for rework was required: Olson has included all these labor charges in the asset construction account. In addition, it included in the account the repairs and maintenance charges of 1,340 that it incurred as a result of the malfunction. Required: 1. Compute, consistent with GAAP and common practice, the amount that Olson should capitalize for the milling machine as of December 31, 2019, when it declares the machine operational. 2. Next Level Identify the costs you included in Requirement 1 for which there are acceptable alternative procedures. Describe the alternative procedure(s) in each case.
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Sims Company, a manufacturer of tablet computers, began operations on January 1, 2019. Its cost and sales information for this year follows. Manufacturing costs Direct materials $ 30 per unit Direct labor $ 50 per unit Overhead costs Variable $ 20 per unit Fixed $ 8,400,000 (per year) Selling and administrative costs for the year Variable $ 750,000 Fixed $ 4,000,000 Production and sales for the year Units produced 105,000 units Units sold 75,000 units Sales price per unit $ 350 per unit 1. Prepare an income statement for the year using variable costing.2. Prepare an income statement for the year using absorption costing.
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