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The following information was collected for the first year of manufacturing for Appliance Apps:
| Direct Materials per Unit | $2.25 |
| Direct Labor per Unit | $1.50 |
| Variable Manufacturing Overhead per Unit | $0.25 |
| Variable Selling and Administration Expenses | $1.75 |
| Units Produced | 40,000 |
| Units Sold | 36,000 |
| Sales Price | $12 |
| Fixed Manufacturing Expenses | $120,000 |
| Fixed Selling and Administration Expenses | $20,000 |
Prepare an income statement under the variable costing method.
| |
| Appliance Apps |
| Income Statement |
| Sales | $fill in the blank 3d2933f2afa0fe1_2 |
| Variable Cost of Goods Sold | fill in the blank 3d2933f2afa0fe1_4 |
| Gross Contribution Margin | $fill in the blank 3d2933f2afa0fe1_6 |
| Variable Selling and Administration Expenses | fill in the blank 3d2933f2afa0fe1_8 |
| Contribution Margin | $fill in the blank 3d2933f2afa0fe1_10 |
| Fixed Manufacturing Expenses | fill in the blank 3d2933f2afa0fe1_12 |
| Fixed Selling and Administration Expenses | fill in the blank 3d2933f2afa0fe1_14 |
| Net Income | $fill in the blank 3d2933f2afa0fe1_16 |
Prepare a reconciliation to the income under the absorption method.
| |
| Appliance Apps |
| Reconciliation |
| Net Income under Variable Costing | $fill in the blank 250cf904ef87028_2 |
| Add: Fixed Manufacturing Overhead Deferred | fill in the blank 250cf904ef87028_4 |
| Net Income under Absorption Costing | $fill in the blank 250cf904ef87028_6 |
Answer & Explanation
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