AJ Manufacturing Company incurred $52,000 of fixed product cost and $41,600 of variable product cost during its first year of operation. Also during its first year, AJ incurred $16,600 of fixed and $13,400 of variable selling and administrative costs. The company sold all of the units it produced for $168,000. Required a. Prepare an income statement using the format required by generally accepted accounting Principles (GAAP). b. Prepare an income statement using the contribution margin approach.

AJ Manufacturing Company incurred $52,000 of fixed product cost and $41,600 of variable product cost during its first year of operation. Also during its first year, AJ incurred $16,600 of fixed and $13,400 of variable selling and administrative costs. The company sold all of the units it produced for $168,000. Required a. Prepare an income statement using the format required by generally accepted accounting Principles (GAAP). b. Prepare an income statement using the contribution margin approach.

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter25: Departmental Accounting

Section: Chapter Questions

Problem 1CE

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