Exercise 19-4 Variable costing income statement LO P2 Kenzi Kayaking, a manufacturer of kayaks, began...
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Exercise 19-4 Variable costing income statement LO P2 Kenzi Kayaking, a manufacturer of kayaks, began operations this year. During this first year, the company produced 1,075 kayaks and sold 825. at a price of $1,075 each. At this first year-end, the company reported the following income statement information using absorption costing. Sales (825 $1,075) Cost of goods sold (825x $400) $886,875 330,000 556,875 Gross margin Selling and administrative expenses220,000 Net income $336,875 Additional Information a. Production cost per kayak totals $400, which consists of $300 in variable production cost and $100 in fixed production cost-the latter amount is based on $107,500 of fixed production costs allocated to the 1,075 kayaks produced. b. The $220,000 in selling and administrative expense consists of $85,000 that is variable and $135,000 that is fixed. Required 1. Prepare an income statement for the current year under variable costing. KENZI KAYAKING Variable Costing Income Statement Net income (loss)
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