Variable and Absorption Costing-Three ProductsWinslow Inc. manufactures and sells three types of shoes. The income statements prepared under the absorption costing method for the threeshoes are as follows:Winslow Inc.Product Income Statements-Absorption CostingFor the Year Ended December 31, 20Y1Cross Training ShoesGolf ShoesRunning Shoes$5,800,000$6,900,000$4,200,000RevenuesCost of goods sold(3,016,000)(3,381,000)(2,814,000)Gross profit$2,784,000$3,519,000$1,386,000Selling and administrative expenses(2,436,000)(2,484,000)(2,142,000)$1,035,000$(756,000)Operating income$348,000In addition, you have determined the following information with respect to allocated fixed costs:CrossGolfRunningTrainingShoesShoesShoesFixed costs:Cost of goods sold$928,000 $897,000 $798,000Selling and administrative expenses828,000696,000588,000These fixed costs are used to support all three product lines and will not change with the elimination of any one product. In addition, you have b. Prepare a variable costing income statement for the three products. Enter a net loss as a negative number using a minus sign.Winslow Inc.Variable Costing Income Statements-Three Product LinesFor the Year Ended December 31, 20Y1Cross Training ShoesGolf ShoesRunning ShoesFixed costs:Total fixed costsOperating income (loss)

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Asked Nov 17, 2019
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Variable and Absorption Costing-Three Products
Winslow Inc. manufactures and sells three types of shoes. The income statements prepared under the absorption costing method for the three
shoes are as follows:
Winslow Inc.
Product Income Statements-Absorption Costing
For the Year Ended December 31, 20Y1
Cross Training Shoes
Golf Shoes
Running Shoes
$5,800,000
$6,900,000
$4,200,000
Revenues
Cost of goods sold
(3,016,000)
(3,381,000)
(2,814,000)
Gross profit
$2,784,000
$3,519,000
$1,386,000
Selling and administrative expenses
(2,436,000)
(2,484,000)
(2,142,000)
$1,035,000
$(756,000)
Operating income
$348,000
In addition, you have determined the following information with respect to allocated fixed costs:
Cross
Golf
Running
Training
Shoes
Shoes
Shoes
Fixed costs:
Cost of goods sold
$928,000 $897,000 $798,000
Selling and administrative expenses
828,000
696,000
588,000
These fixed costs are used to support all three product lines and will not change with the elimination of any one product. In addition, you have
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Variable and Absorption Costing-Three Products Winslow Inc. manufactures and sells three types of shoes. The income statements prepared under the absorption costing method for the three shoes are as follows: Winslow Inc. Product Income Statements-Absorption Costing For the Year Ended December 31, 20Y1 Cross Training Shoes Golf Shoes Running Shoes $5,800,000 $6,900,000 $4,200,000 Revenues Cost of goods sold (3,016,000) (3,381,000) (2,814,000) Gross profit $2,784,000 $3,519,000 $1,386,000 Selling and administrative expenses (2,436,000) (2,484,000) (2,142,000) $1,035,000 $(756,000) Operating income $348,000 In addition, you have determined the following information with respect to allocated fixed costs: Cross Golf Running Training Shoes Shoes Shoes Fixed costs: Cost of goods sold $928,000 $897,000 $798,000 Selling and administrative expenses 828,000 696,000 588,000 These fixed costs are used to support all three product lines and will not change with the elimination of any one product. In addition, you have

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b. Prepare a variable costing income statement for the three products. Enter a net loss as a negative number using a minus sign.
Winslow Inc.
Variable Costing Income Statements-Three Product Lines
For the Year Ended December 31, 20Y1
Cross Training Shoes
Golf Shoes
Running Shoes
Fixed costs:
Total fixed costs
Operating income (loss)
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b. Prepare a variable costing income statement for the three products. Enter a net loss as a negative number using a minus sign. Winslow Inc. Variable Costing Income Statements-Three Product Lines For the Year Ended December 31, 20Y1 Cross Training Shoes Golf Shoes Running Shoes Fixed costs: Total fixed costs Operating income (loss)

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Expert Answer

Step 1

Formula to compute the variable cost of goods sold.

Variable cost of
Total cost of goods sold
-Fixed cost of goods sold
goods sold
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Variable cost of Total cost of goods sold -Fixed cost of goods sold goods sold

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Step 2

Formula to compute the Variable selling and a...

(Total selling and
administrative expenses
-Fixed cost of goods sold
(Total variable selling
and administrative cost
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(Total selling and administrative expenses -Fixed cost of goods sold (Total variable selling and administrative cost

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