Absorption and Variable Costing Income Statements Assignment
Absorption and Variable Costing Income Statements During the first month of operations ended July 31, YoSan Inc. manufactured 9,900 flat-panel televisions, of which 9,300 were sold. Operating data for the month are summarized as follows: Sales $1,627,500 Manufacturing costs: Direct materials $811,800 247,500 Direct labor Variable manufacturing cost 207,900 Fixed manufacturing cost 108,900 1,376,100 Selling and administrative expenses Variable $130,200 59,900 Fixed 190,100
Required: 1. Prepare an income statement based on the absorption costing concept YoSan Inc. Absorption Costing Income Statement For the Month Ended July 31 Sales 1,627,500 Cost of goods sold: Cost of goods manufactured 1,376,100 Inventory, July 31 83,400 Total cost of goods sold 1,292,700 Gross profit 334,800 Selli dropdown administrative expenses 190,100 Income from operations 144,700 Feedback Check My Work 1. Sales-(cost of goods manufactured – ending inventory*) = Gross profit; gross profit – selling and administrative expense “(Manufactured Units – Sold units) x (total manufacturing costs/manufactured units) Learning Objective 1 and Learning Objective 2 2. Prepare an income statement based on the variable costing concept. YoSan Inc. Variable Costing Income Statement For the Month Ended July 31 Sales 1,627,500 Variable cost of goods sold: Variable cost of goods manufactured 1,267,200 Inventory, July 31 17,792X Inventory, July 31 17,792 X Fixed costs: $ Feedback Check My Work 2. Sales -variable cost of goods sold Manufacturing margin; Manufacturing margin – variable selling and administrative expenses Contribution margin; Contribution margin – (fixed manufacturing costs fixed selling and administrative expenses) income from operations “Variable cost of goods sold Variable cost of goods manufactured – [(Manufactured Units Sold units) x (variable manufacturing costs/manufactured units)] Learning Objective 1 and Learning Objective 2. . Explain the reason for the difference in the amount of income from operations reported in (1) and (2) The income from operations reported under costing exceeds the income from operations reported under costing by the. .