Jackson Company produces plastic that is used for injection-molding applications such as gears for small motors. In 2016, the first year of operations, Jackson produced 6,000 tons of plastic and sold 4,500 tons. In 2017, the production and sales results were exactly reversed. In each year, the selling price per ton was $2,000, variable manufacturing costs were 19% of the sales price of units produced, variable selling expenses were 8% of the selling price of units sold, fixed manufacturing costs were $4,380,000, and fixed administrative expenses were $540,000. Prepare income statements for each year using variable costing.JACKSON COMPANYIncome Statement Variable Costing $ $ $ $ JACKSON COMPANYIncome Statement Variable Costing $ $ $ $ Prepare income statements for each year using absorption costing.JACKSON COMPANYIncome Statement Absorption Costing $ $ $ JACKSON COMPANYIncome Statement Absorption Costing $ $ $ Reconcile the differences each year in net income under the two costing approaches. 2016 2017Variable costing net income $ $ Fixed manufacturing overhead expensed with variable costing $ $ Less: Fixed manufacturing overhead expensed with absorption costing Difference Absorption costing net income $ $

The income statement is prepared to record the revenues and expenses of the current period. The net…

Answered: Jackson Company produces plastic that…

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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Prepare income statements for each year using absorption costing.

JACKSON COMPANY Income Statement Absorption Costing
		$

	$








		$

JACKSON COMPANY Income Statement Absorption Costing
		$

	$








		$

Reconcile the differences each year in net income under the two costing approaches.

	2016	2017
Variable costing net income	$	$
Fixed manufacturing overhead
expensed with variable costing	$	$
Less: Fixed manufacturing overhead
expensed with absorption costing
Difference
Absorption costing net income	$	$

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