FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Related questions
Question
Exercise 11-13A (Algo) Prepare an income statement using the contribution margin approach LO 11-3
AJ Manufacturing Company incurred $56,000 of fixed product cost and $44,800 of variable product cost during its first year of operation. Also during its first year, AJ incurred $17,800 of fixed and $14,200 of variable selling and administrative costs. The company sold all of the units it produced for $184,000.
Required
- Prepare an income statement using the format required by generally accepted accounting Principles (GAAP).
- Prepare an income statement using the contribution margin approach.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution
Trending nowThis is a popular solution!
Step by stepSolved in 3 steps
Knowledge Booster
Similar questions
- Exercise 18-8 (Algo) Computing missing amounts in contribution margin Income statements LO A1 Compute the missing amounts in the contribution income statement shown below: (Round "Per Unit" answers to 2 decimal places.) Company A Company B Number of units sold Sales Variable costs Contribution margin Fixed costs Income 2,375 Total $ 465,000 $ 97.00 Per unit Total Per unit 302,400 123,500 166,250 $ 108,000 61,750arrow_forwardPlease do not give solution in image format thankuarrow_forwardt 0 ences Mc Graw Hill Required information [The following information applies to the questions displayed below.] Diego Company manufactures one product that is sold for $75 per unit in two geographic regions-the East and West regions. The following information pertains to the company's first year of operations in which it produced 46,000 units and sold 42,000 units. Variable costs per unit: Manufacturing: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expense Break even point $ 25 $ 20 The company sold 31,000 units in the East region and 11,000 units in the West region. It determined that $200,000 of its fixed selling and administrative expense is traceable to the West region, $150,000 is traceable to the East region, and the remaining $38,000 is a common fixed expense. The company will continue to incur the total amount of its fixed manufacturing…arrow_forward
- EXERCISE 1-11 Cost Behavior; Contribution Format Income Statement L01-4, L01-6 Harris Company manufactures and sells a single product. A partially completed schedule of the com- pany's total costs and costs per unit over the relevant range of 30,000 to 50,000 units is given below: Vist Jumsch Total costs: Variable cost. Fixed cost Total cost. Costs per unit: Variable cost. Fixed cost Total cost per unit. Units Produced and Sold 40,000 30,000 $180,000 300,000 $480,000 ? ? ? ? ? ? ? ? ? 50,000 ? ? ? ? ? ? Required: 1. Complete the above schedule of the company's total costs and costs per unit. 2. Assume that the company produces and sells 45,000 units during the year at a selling price of $16 per unit. Prepare a contribution format income statement for the year. 6 107arrow_forwardExercise 11-15A (Algo) Using contribution margin format income statement to measure the magnitude of operating leverage LO 11-3, 11-4 The following income statement was drawn from the records of Benson, a merchandising firm: BENSON COMPANY Income Statement For the Year Ended December 31 Sales revenue (4,500 units × $163) $ 733,500 Cost of goods sold (4,500 units × $82) (369,000 ) Gross margin 364,500 Sales commissions (5% of sales) (36,675 ) Administrative salaries expense (85,000 ) Advertising expense (34,000 ) Depreciation expense (48,000 ) Shipping and handling expenses (4,500 units × $3) (13,500 ) Net income $ 147,325 Required Reconstruct the income statement using the contribution margin format. Calculate the magnitude of operating leverage. Use the measure of operating leverage to determine the amount of net income Benson will earn if sales increase by 20 percent.arrow_forwardExercise 19-7 (Algo) Income reporting under absorption costing and variable costing LO P2 Sims Company began operations on January 1. Its cost and sales information for this year follow. Direct materials $ 40 per unit Direct labor $ 60 per unit Variable overhead $ 40 per unit Fixed overhead $ 6,300,000 per year Variable selling and administrative expenses $ 11 per unit Fixed selling and administrative expenses $ 5,000,000 per year Units produced 105,000 units Units sold 75,000 units Sales price $ 350 per unit 1. Prepare an income statement for the year using variable costing.2. Prepare an income statement for the year using absorption costing.arrow_forward
- Nonearrow_forwardQuestion Content Area Product J is one of the many products manufactured and sold by Oceanside Company. An income statement by product line for the past year indicated a net profit for Product J of $2,750. This net profit resulted from sales of $275,000, cost of goods sold of $186,500, and operating expenses of $85,750. It is estimated that 30% of the cost of goods sold represents fixed factory overhead costs and that 40% of the operating expense is fixed. If Product J is retained, the revenue, costs, and expenses are not expected to change significantly from those of the current year. Because of the large number of products manufactured, the total fixed costs and expenses are not expected to decline significantly if Product J is discontinued. Question Content Area Prepare a differential analysis report dated February 8 of the current year. If an amount is zero, enter "0". If required, use a minus sign to indicate a loss. Differential AnalysisContinue (Alternative 1) or…arrow_forwardpart two not graded Variable and Absorption CostingSummarized data for 2016 (the first year of operations) for Gorman Products, Inc., are as follows: Sales (75,000 units) $3,000,000 Production costs (80,000 units) Direct material 880,000 Direct labor 720,000 Manufacturing overhead: Variable 544,000 Fixed 320,000 Operating expenses: Variable 168,000 Fixed 240,000 Depreciation on equipment 60,000 Real estate taxes 18,000 Personal property taxes (inventory & equipment) 28,800 Personnel department expenses 30,000 a. Prepare an income statement based on full absorption costing.Only use a negative sign with your answer for net income (loss), if the answer represents a net loss. Otherwise, do not use negative signs with any answers. Round answers to the nearest whole number, when applicable. Absorption Costing Income Statement…arrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education