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Firefox File Edit View History Bookmarks Tools Window Help ???100% , Wed 1:27 PM Atika Ishtiaq a E https:newconnect.mheducation.com/flow/connect.html .Search ±lin 3 D @ Ch 06 Ex 6-4 G Help Save & Exit Submit Saved si Check my work Exercise 6-4 Variable costing income statement LO P2 Kenzi Kayaking, a manufacturer of kayaks, began operations this year. During this first year, the company produced 1,050 kayaks and sold 800. at a price of $1,050 each. At this first year-end, the company reported the following income statement information using absorption costing. points eBoak Sales (800$1,050) Cost of goods sold (800 x $450) Cross margin Selling and administrative expenses Net income $ 840,000 360, 000 480, 000 230, 000 $ 250, 000 Hint Ask Print Additional Information a. Product cost per kayak totals $450, which consists of $350 in variable production cost and $100 in fixed production cost-the latter amount is based on $105,000 of flxed production costs allocated to the 1,050 kayaks produced b. The $230,000 in selling and administrative expense consists of $95,000 that is variable and $135,000 that is fixed. Required 1. Prepare an income statement for the current year under variable costing. KENZI KAYAKING Variable Costing Income Statement Prev of Next Hill 1013

Solution

Income Statement (variable costing) for the year ended December 31,2015 sales 840,000 Variable expense Variable production costs (800*350) 280000 Variable selling and administrative costs 95,000 total variable expense 375,000 Contribution margin 465,000 Fixed expense Fixed overhead 105,000 Fixed selling and administrative cost 135,000 total fixed expenses 240,000 Net income 225,000