Income Statements, Variable and Absorption Costing Income Statements, Variable and Absorption CostingThe following information pertains to Vladamir, Inc., for last year:Beginning inventory, units1,500Units produced100,000Units sold101,000Variable costs per unit:Direct materials$8.00Direct labor$9.00Variable overhead$2.00Variable selling expenses$2.00Fixed costs per year:Fixed overhead$300,000Fixed selling and administrative expenses $230,000There are no work-in-process inventories. Normal activity is 100,000 units. Expected and actual overhead costs are the same. Costs have not changed from one year to the next.Required:1. How many units are in ending inventory?units2. Without preparing an income statement, indicate what the difference will be between variable-costing income and absorption-costing income. 3a. Assume the selling price per unit is $30. Prepare an income statement using variable costing.Vladamir, Inc.Variable-Costing Income StatementFor Last YearLess:Contribution marginLess:Operating income3b. Assume the selling price per unit is $30. Prepare an income statement using absorption costing.Vladamir, Inc.Absorption-Costing IncomeStatementFor Last YearGross profitOperating income

The question is based on the concept of Cost Accounting.

The following information pertains to Vladamir, Inc., for last year: Beginning inventory, units 1,500 Units produced 100,000 Units sold 101,000 Variable costs per unit: Direct materials $8.00 Direct labor $9.00 Variable overhead $2.00 Variable selling expenses $2.00

The following information pertains to Vladamir, Inc., for last year: Beginning inventory, units 1,500 Units produced 100,000 Units sold 101,000 Variable costs per unit: Direct materials $8.00 Direct labor $9.00 Variable overhead $2.00 Variable selling expenses $2.00

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter18: Pricing And Profitability Analysis

Section: Chapter Questions

Problem 28P: The following information pertains to Vladamir, Inc., for last year: There are no work-in-process...

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