do not give solution in image Dowell Company produces a single product. Its Income statements under absorption costing for its first two years of operation follow.Income Statements (Absorption Costing)Sales ($63 per unit)Cost of goods sold ($51 per unit)Year 2$ 4,284,0003,468,000816,000394,000Gross profitSelling and administrative expensesIncome$ 422,000Additional Informationa. Sales and production data for these first two years follow.UnitsUnits producedUnits soldYear 1Direct materials:Direct labori52,00036,000Year 252,00068,000Year 1$ 2,268,0001,836,000432,000298,000$ 134,000b. Variable costs per unit and fixed costs per year are unchanged during these years. The company's $51 per unit product cost usingabsorption costing consists of the following.Variable overheadFixed overhead ($520,000/52,000 units)Total product cost per unit$ 1522410$ 51 c. Selling and administrative expenses consist of the following.Selling and Administrative ExpensesVariable selling and administrative ($3 per unit sold)Fixed selling and administrativeTotalSDOWELL CompanyIncome Statements (Variable Costing)ĊYear 1Required:Prepare Income statements for each of these two years under variable costing. (Loss amounts should be entered with a minus sign.)Year 1$ 108,000190,000$ 298,000Year 2Year 2$ 204,000190,000$ 394,000

Variable costing or direct costing method is used for internal decision making. It uses the…

c. Selling and administrative expenses consist of the following. Selling and Administrative Expenses Variable selling and administrative ($3 per unit sold) Fixed selling and administrative Total 3 DOWELL Company Income Statements (Variable Costing) C Year 1 Required: Prepare Income statements for each of these two years under variable costing. (Loss amounts should be entered with a minus sign.) Year 1 $ 108,000 190,000 $ 298,000 Year 2 Year 2 $ 204,000 190,000 $ 394,000

c. Selling and administrative expenses consist of the following. Selling and Administrative Expenses Variable selling and administrative ($3 per unit sold) Fixed selling and administrative Total 3 DOWELL Company Income Statements (Variable Costing) C Year 1 Required: Prepare Income statements for each of these two years under variable costing. (Loss amounts should be entered with a minus sign.) Year 1 $ 108,000 190,000 $ 298,000 Year 2 Year 2 $ 204,000 190,000 $ 394,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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