Item 3 Item 3 10 points Sims Company, a manufacturer of tablet computers, began operations on January 1, 2019. Its cost and sales information for this year follows. Manufacturing costs Direct materials $ 40 per unit Direct labor $ 60 per unit Overhead costs Variable $ 30 per unit Fixed $ 7,000,000 (per year) Selling and administrative costs for the year Variable $ 770,000 Fixed $ 4,250,000 Production and sales for the year Units produced 100,000 units Units sold 70,000 units Sales price per unit $ 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.
Item 3 Item 3 10 points Sims Company, a manufacturer of tablet computers, began operations on January 1, 2019. Its cost and sales information for this year follows. Manufacturing costs Direct materials $ 40 per unit Direct labor $ 60 per unit Overhead costs Variable $ 30 per unit Fixed $ 7,000,000 (per year) Selling and administrative costs for the year Variable $ 770,000 Fixed $ 4,250,000 Production and sales for the year Units produced 100,000 units Units sold 70,000 units Sales price per unit $ 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Item 3
Item 3 10 points
Sims Company, a manufacturer of tablet computers, began operations on January 1, 2019. Its cost and sales information for this year follows.
| Direct materials | $ | 40 | per unit |
| Direct labor | $ | 60 | per unit |
| Variable | $ | 30 | per unit |
| Fixed | $ | 7,000,000 | (per year) |
| Selling and administrative costs for the year | |||
| Variable | $ | 770,000 | |
| Fixed | $ | 4,250,000 | |
| Production and sales for the year | |||
| Units produced | 100,000 | units | |
| Units sold | 70,000 | units | |
| Sales price per unit | $ | 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.
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