Reference no: EM132687884
Income Statements under Absorption and Variable Costing
Shawnee Motors Inc. assembles and sells MP3 players. The company began operations on August 1 and operated at 100% of capacity during the first month. The following data summarize the results for August:
Sales (11,500 units) $1,265,000
Production costs (15,000 units):
Direct materials $610,500
Direct labor292,500
Variable factory overhead147,000
Fixed factory overhead 97,500 1,147,500
Selling and administrative expenses:
Variable selling and administrative expenses$177,900
Fixed selling and administrative expenses 68,900 246,800
If required, round interim per-unit calculations to the nearest cent.
Problem a. Prepare an income statement according to the absorption costing concept.
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