Summarized data for Walrus Co. for its first year of operations are:Sales (110,000 units)$5,500,000Production Costs (132,000 units):Direct Material1,980,000Direct Labor1,584,000Manufacturing Overhead:Variable924,000Fixed330,000Selling and Administrative Expenses:Variable286,000Fixed473,000A. Prepare an income statement under absorption costing.Walrus Co.Absorption Costing Income StatementCost of Goods Sold: B. Prepare an income statement under variable costing.Walrus Co.Variable Costing Income StatementVariable Cost of Goods Sold:Fixed Expenses:

Answered: Summarized data for Walrus Co. for its…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter4: Job Order Costing

Section: Chapter Questions

Problem 6PA: During the year, a company purchased raw materials of $77,321, and incurred direct labor costs of...

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Summarized data for Walrus Co. for its first year of operations are:
Sales (110,000 units)
$5,500,000
Production Costs (132,000 units):
Direct Material
1,980,000
Direct Labor
1,584,000
Manufacturing Overhead:
Variable
924,000
Fixed
330,000
Selling and Administrative Expenses:
Variable
286,000
Fixed
473,000
A. Prepare an income statement under absorption costing.
Walrus Co.
Absorption Costing Income Statement
Cost of Goods Sold:

B. Prepare an income statement under variable costing.
Walrus Co.
Variable Costing Income Statement
Variable Cost of Goods Sold:
Fixed Expenses:

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Step 1

Net income (NI), also known as net earnings, is calculated by subtracting sales from the cost of goods sold, selling, administrative expenses expenses, operating expenses, depreciation, interest, taxation, and other expenses. It is a useful number for investors to determine how much revenue exceeds an organization's expenses.

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