Homework SourseMap Company which has only one product has provided the foll
Map Company, which has only one product, has provided the following data concerning its most recent month of operations: Selling price $140 Units in beginning inventory 0 Units produced 7,400 Units sold 7,200 Units in ending inventory 200 Variable costs per unit: Direct materials $42 Direct labor $32 Variable manufacturing overhead $1 Variable selling and administrative $8 Fixed costs: Fixed manufacturing overhead $280,800 Fixed selling and administrative $98,000
Prepare an income statement for the month using the contribution format and the variable costing method.
Prepare an income statement for the month using the absorption costing method.
Solution
Prepare an income statement for the month using the contribution format and the variable costing method.
Prepare an income statement for the month using the absorption costing method.
| Sales (7200*140) | 1008000 | |
| Less: Variable cost of goods sold | ||
| Direct material | 302400 | |
| Direct labour | 230400 | |
| Variable manufacturing overhead | 7200 | |
| Total variable cost of goods sold | 540000 | |
| Manufacturing margin | 468000 | |
| Variable selling and administrative expense | 57600 | |
| Contribution margin | 410400 | |
| Fixed cost | ||
| Fixed manufacturing overhead | 280800 | |
| Fixed selling and administrative expense | 98000 | |
| Total fixed cost | 378800 | |
| Net operating income | 31600 |
