Sims Company began operations on January 1. Its cost and sales information for this year follow. Direct materials Direct labor Variable overhead Fixed overhead Variable selling and administrative expenses Fixed selling and administrative expenses Units produced Units sold Sales price Required: 1. Prepare an income statement for the year using variable casting. ales Less: Variable expenses Direct materials Direct labor Contribution margin Less: Fixed expenses (Use cells A4 to C12 from the given information to complete this question. Negative amounts or amounts to be deducted should be input and displayed as negative values. All other answers should be input and displayed as positive values.) SIMS COMPANY Income Statement (Variable Costing) Fixed selling and administrative expenses Fixed averhead Income (loss) $40 per unit 560 per unit $30 per unit $7,000,000 per year $11 per unit $4,250,000 per year 100,000 units 70,000 units $350 per unit SIMS COMPANY Income Statement (Absorption Casting) Cost of goods sold Gross profit Selling and administrative expenses Income $2,800,000 4,200,000 4,250,000 7,000,000 $24,500,000 2. Prepare an income statement for the year us ing absorption costing. (Use cells A4 to C12 from the given information to complete this question. Negative amounts or amounts to be deducted should be input and displayed as negative values. All other answers should be input and displayed as positive values.) $24,500,000 7,000,000 17,500,000 11,250,000 56,250,000
Sims Company began operations on January 1. Its cost and sales information for this year follow. Direct materials Direct labor Variable overhead Fixed overhead Variable selling and administrative expenses Fixed selling and administrative expenses Units produced Units sold Sales price Required: 1. Prepare an income statement for the year using variable casting. ales Less: Variable expenses Direct materials Direct labor Contribution margin Less: Fixed expenses (Use cells A4 to C12 from the given information to complete this question. Negative amounts or amounts to be deducted should be input and displayed as negative values. All other answers should be input and displayed as positive values.) SIMS COMPANY Income Statement (Variable Costing) Fixed selling and administrative expenses Fixed averhead Income (loss) $40 per unit 560 per unit $30 per unit $7,000,000 per year $11 per unit $4,250,000 per year 100,000 units 70,000 units $350 per unit SIMS COMPANY Income Statement (Absorption Casting) Cost of goods sold Gross profit Selling and administrative expenses Income $2,800,000 4,200,000 4,250,000 7,000,000 $24,500,000 2. Prepare an income statement for the year us ing absorption costing. (Use cells A4 to C12 from the given information to complete this question. Negative amounts or amounts to be deducted should be input and displayed as negative values. All other answers should be input and displayed as positive values.) $24,500,000 7,000,000 17,500,000 11,250,000 56,250,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Sims Company began operations on January 1. Its cost and sales information for this year follow.
$40 per unit
$60 per unit
$30 per unit
$7,000,000 per year
$11 per unit
$4,250,000 per year
100,000 units
70,000 units
$350 per unit
Direct materials
Direct labor
Variable overhead
Fixed overhead
Variable selling and administrative expenses
Fixed selling and administrative expens es
Units produced
Units sold
Sales price
Required:
1. Prepare an income statement for the year using variable costing.
(Use cells A4 to C12 from the given information to complete this question. Negative amounts or amounts to be deducted
should be input and displayed as negative values. All other answers should be input and displayed as positive values.)
SIMS COMPANY
Income Statement (Variable Costing)
Sales
Less: Variable expenses
Direct materials
Direct labor
Contribution margin
Less: Fixed expenses
Fixed selling and administrative expenses
Fixed averhead
Income (loss)
SIMS COMPANY
Income Statement (Absorption Costing)
$2,800,000
4,200,000
Sales
Cost of goods sold
Grass profit
Selling and administrative expenses
Income
4,250,000
7,000,000
$24,500,000
2. Prepare an income statement for the year us ing absorption costing.
(Use cells A4 to C12 from the given information to complete this question. Negative amounts or amounts to be deducted
should be input and displayed as negative values. All other answers should be input and displayed as positive values.)
$24,500,000
7,000,000
17,500,000
11,250,000
$6,250,000
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