Basics of variable costing income statements

Assignment Help Accounting Basics

Reference no: EM13138002

Duif Company's absorption costing income statement for the last year of operations is presented below:

Sales.........................................................$70,000
Less cost of goods sold:
Beginning inventory.............................................. 0
Add cost of goods manufactured..................48,000
Goods available for sale...............................48,000
Less ending inventory....................................6,000
Cost of goods sold......................................42,000
Gross margin..............................................28,000
Less selling & admin. expenses....................25,000
Net operating income................................$ 3,000

Data on units produced and sold for the year are given below:

Units in beginning inventory...................................0
Units produced..............................................8,000
Units sold......................................................7,000

Fixed factory overhead totaled $16,000 for the year. This overhead was applied to products at a rate of $2 per unit. Variable selling and administrative expenses were $3 per unit sold.

Required: Prepare a new income statement for the year using variable costing. Comment on the differences between the absorption costing and the variable costing income statements.

Reference no: EM13138002

Questions Cloud

What is tachibana corporation taxable income : premiums on officers' life insurance policies (the corporation is the beneficiary for these policies), and $100 for fines. What is Tachibana Corporation's taxable income?

Carrying a uniformy distributed load : The bending moment M at position x m from the end of a simply supported beam of lenght L m carrying a uniformy distributed load of w Kn m-1 is given by

Basic reluctance to use available formal healthcare resource : AREAS OF CONCERNS OF THE AGGREGATE: 1)BASIC RELUCTANCE TO USE AVAILABLE FORMAL HEALTHCARE RESOURCES 2) uSE OF ALTERNATIVE AND COMPLENTARY APPROACHES TO TREAT OF HEALTH PROBLEMS PREVALENT AMONG LARGE SEGEMNT POPULATION

Compute kraft inventory turnover for the year : Compute the number of days required by Kraft to sell its average inventory. Compute Kraft’s inventory turnover for the year.

Basics of variable costing income statements : Prepare a new income statement for the year using variable costing. Comment on the differences between the absorption costing and the variable costing income statements.

The dividend discount : Calculate the annual rate of return for each asset in each of the 10 preceding years, and those values to find the average annual return for each asset over the 10-year period.

Explain derive an expression for the bounding energy : Derive an expression for the bounding energy Eo in terms of the equilibrium interionic separation ro and the constants D, and p using the following procedure

How many ml should be given to an infant : An infant ibuprofen suspension contains 100 mg/5.0 mL suspension. The recommended dose is 10mg/kg of body weight.

Estimate cost of goods sold and the cost of the july : Estimate cost of goods sold and the cost of the July 31 ending inventory using the retail method of evaluation. (Omit the "$" sign in your response.)

User Account

All Pages