Cool Sky reports the following for its first year of operations. The company produced 44,000 units and sold 36,000 units at a price of $140 per unit. Direct materials Direct labor Variable overhead Fixed overhead Variable selling and administrative expenses Fixed selling and administrative expenses 2b. Assume the company uses variable costing. Prepare its income statement for the year under variable costing. Income Statement (Variable Costing) Sales Less: Variable expenses Variable cost of goods sold Variable selling and administrative expenses Contribution margin Less: Fixed expenses Fixed selling and administrative expenses Income $ 3,240,000 396,000 105,000 5,040,000 3,636,000 1,404,000 $ 60 per unit $ 22 per unit $ 8 per unit $ 528,000 per year $ 11 per unit $ 105,000 per year 105,000

Cool Sky reports the following for its first year of operations. The company produced 44,000 units and sold 36,000 units at a price of $140 per unit. Direct materials Direct labor Variable overhead Fixed overhead Variable selling and administrative expenses Fixed selling and administrative expenses 2b. Assume the company uses variable costing. Prepare its income statement for the year under variable costing. Income Statement (Variable Costing) Sales Less: Variable expenses Variable cost of goods sold Variable selling and administrative expenses Contribution margin Less: Fixed expenses Fixed selling and administrative expenses Income $ 3,240,000 396,000 105,000 5,040,000 3,636,000 1,404,000 $ 60 per unit $ 22 per unit $ 8 per unit $ 528,000 per year $ 11 per unit $ 105,000 per year 105,000

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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! Required information [The following information applies to the questions displayed below.] Cool Sky reports the following for its first year of operations. The company produced 44,000 units and sold 36,000 units at a price of $140 per unit. Direct materials Direct labor Variable overhead Fixed overhead Variable selling and administrative expenses Fixed selling and administrative expenses Income Statement (Absorption Costing) 1b. Assume the company uses absorption costing. Prepare its income statement for the year under absorption costing. Sales Cost of goods sold Gross profit Income Income $ $ $ $ 5,040,000 3,240,000 1,800,000 1,404,000 396,000 $ 60 per unit $ 22 per unit $ 8 per unit 528,000 per year $ 11 per unit 105,000 per year
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