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Income Statements under Abscrption Costing and Variable Costing poplin Industries Inc. manufactures and sells high-quality sporting goods equipment under its highly recognizable )-Sports logo. The company began operations on May 1 and operated at 100% of capacity (72,600 units) during the first month, creating an ending nventory of 6,600 units. During June, the company produced 66,000 garments during the month but sold 72,600 units at $90 per unit. The June manufacturing costs and selling and administrative expenses were as follows: Number of Units Unit Cost Total Cost Manufacturing costs in June 1 beginning inventory: Variable 6,600 $36.00 $237,600 Fixed 6,600 14.00 92,400 Total $50.00 $330,000 Manufacturing costs in June: Variable 66,000 Fixed 66,000 $36.00 $2,376,000 15.40 1,016,400 $51.40 $3,392,400 Total Selling and administrative expenses in June: Variable 72,600 Fixed 18.20 $1,321,320 7.00 508,200 72,600 Total 25.20 $1,829,520 a. Prepare an income statement according to the absorption costing concept for June TOA Show Me How a. Prepare an income statement according to the absorption costing concept for June Joplin Industries Inc. Absorption Costing Income Statement For the Month Ended June 30 Cost of goods told: Qo b. Prepare an income statement according to the variable casting concept for June. Joplin Industries Inc Variable Costing Income Statement For the Month Ended June 30 AL LIFE Uk . & 3 5 6 7 CO 99 E E R T Y D F G H J K 1 V B N M alt Ctrl Book Show Me How Joplin Industries Inc. Variable Costing Income Statement For the Month Ended June 30 Fixed costs 00 What is the reason for the difference in the amount of income from operation reported in (a) and (b) Under the method, the fixed manufacturing cost indude in the cost of goods sold matches with the new all of the fixed manufacturing cost is deducted in the period in which it is incurred, regardless of the amount of ventory change. Thus, when inventory decreases, the come statement will have a lowme operations 5 4 3 5 a 8 7 9 E R T T Y P U D G H J K C V B N M alt Ctrl

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