Trez Company began operations this year. During this first year, the company produced 100,000 units and sold 80,000 units. The absorption costing income statement for this year follows. Sales (80,000 units x $45 per unit) Cost of goods sold Beginning inventory Cost of goods manufactured (100,000 units x $25 per unit) Cost of good available for sale Ending inventory (20,000 × $25) Cost of goods sold Gross margin Selling and administrative expenses Net income Direct materials Direct labor Variable overhead Fixed overhead ($700,000/100,000 units) TREZ Company Variable Costing Income Statement $ Net income (loss) $ 4 11 $ 3 $ 7 $ per unit per unit per unit per unit Required: 1. Prepare an income statement for the company under variable costing. Additional Information Selling and administrative expenses consist of $450,000 in annual fixed expenses and $2 per unit in variable selling and administrative expenses. The company's product cost of $25 per unit is computed as follows. 0 2,500,000 2,500,000 500,000 $ $ 3,600,000 2,000,000 1,600,000 610,000 990,000
Trez Company began operations this year. During this first year, the company produced 100,000 units and sold 80,000 units. The absorption costing income statement for this year follows. Sales (80,000 units x $45 per unit) Cost of goods sold Beginning inventory Cost of goods manufactured (100,000 units x $25 per unit) Cost of good available for sale Ending inventory (20,000 × $25) Cost of goods sold Gross margin Selling and administrative expenses Net income Direct materials Direct labor Variable overhead Fixed overhead ($700,000/100,000 units) TREZ Company Variable Costing Income Statement $ Net income (loss) $ 4 11 $ 3 $ 7 $ per unit per unit per unit per unit Required: 1. Prepare an income statement for the company under variable costing. Additional Information Selling and administrative expenses consist of $450,000 in annual fixed expenses and $2 per unit in variable selling and administrative expenses. The company's product cost of $25 per unit is computed as follows. 0 2,500,000 2,500,000 500,000 $ $ 3,600,000 2,000,000 1,600,000 610,000 990,000
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter18: Pricing And Profitability Analysis
Section: Chapter Questions
Problem 29P: Jellison Company had the following operating data for its first two years of operations: Jellison...
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