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On November 30, the end of the first month of operations, Weatherford Company prepared the following...

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Accounting

  1. On November 30, the end of the first month of operations,Weatherford Company prepared the following income statement, basedon the The reporting of the costs of manufactured products,normally direct materials, direct labor, and factory overhead, asproduct costs.absorption costing concept:

    Weatherford Company
    Absorption Costing Income Statement
    For the Month Ended November 30
    Sales (5,900 units)$123,900
    Cost of goods sold:
    Cost of goods manufactured (7,000 units)$105,000
    Inventory, November 30 (1,000 units)(15,000)
    Total cost of goods sold90,000
    Gross profit$33,900
    Selling and administrative expenses19,330
    Income from operations$14,570

    Assume the fixed manufacturing costs were $21,000 and the fixedselling and administrative expenses were $9,470.

    Prepare an income statement according to the variable costingconcept. Round all final answers to whole dollars.

    Sales$
    Variable cost of goods sold:
    Variable cost of goods manufactured$
    Inventory, November 30
    Total variable cost of goods sold
    Manufacturing margin$
    Variable selling and administrative expenses
    Contribution margin$
    Fixed costs:
    Fixed manufacturing costs$
    Fixed selling and administrative expenses
    Total fixed costs
    Income from operations

Answer & Explanation Solved by verified expert
4.3 Ratings (629 Votes)

Income Statement-Variable Costing
Workings Amount
Sales (5900 units) $                                                          21 $               123,900
Variable Cost of Goods Sold
Cost of goods manufactured (7000 units) $                                               105,000
less inventory November 30 (1100 units) $                                                 16,500
Total Variable Cost of Goods Sold $                 88,500
Manufacturing Margin $                 35,400
Variable Selling and Administration expenses $19330-$9470 $                   9,860
Contribution Margin $                 25,540
Fixed Costs
Fixed Manufacturing Costs $                                                 21,000
Fixed Selling and Administration expenses $                                                    9,470 $                 30,470
Net Operating Income $                 (4,930)
Cost of Goods Manufactured $105000/7000 $                         15

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