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Exercise 19-8(Algo) Variable costing income statement LO P2 Kenzi, a manufacturer of kayaks,...

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Accounting

Exercise 19-8(Algo) Variable costing income statement LO P2
Kenzi, a manufacturer of kayaks, began operations this year. During this year, the company produced 1,050 kayaks and sold 800 at a price of $1,050 each. At year-end, the company reported the following income statement information using absorption costing.
Sales (800\times $1,050) $ 840,000
Cost of goods sold (800\times $475)380,000
Gross profit 460,000
Selling and administrative expenses 210,000
Income $ 250,000
Additional Information
a. Product cost per kayak under absorption costing totals $475, which consists of $375 in direct materials, direct labor, and variable overhead costs and $100 in fixed overhead cost. Fixed overhead of $100 per unit is based on $105,000 of fixed overhead per year divided by 1,050 kayaks produced.
b. The $210,000 in selling and administrative expenses consists of $75,000 that is variable and $135,000 that is fixed.
Prepare an income statement for the current year under variable costing.

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