15# Exercise 6-7 (Algo) Income reporting underabsorption costing and variable costing LO P2Sims Company began operations on January 1. Its costand sales information for this year follow.Direct materialsDirect laborVariable overheadFixed overheadVariable selling and administrative expensesFixed selling and administrative expensesUnits producedUnits soldSales price$ 30$ 50$ 20$8,800,000$11$4,250,000110,00080,000$360per unitper unitper unitper yearper unitper yearunitsunitsper unit1. Prepare an income statement for the year usingvariable costing.2. Prepare an income statement for the year usingabsorption costing.

Name: 15# Exercise 6-7 (Algo) Income reporting underabsorption costing and
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Description: 15# Exercise 6-7 (Algo) Income reporting underabsorption costing and variable costing LO P2Sims Company began operations on January 1. Its costand sales information for this year follow.Direct materialsDirect laborVariable overheadFixed overheadVari

MEANING OF ABSORPTION COSTING Absorption costing is the practice of charging all variable…

Answered: 1. Prepare an income statement for the…

Business

Accounting

1. Prepare an income statement for the year using variable costing. 2. Prepare an income statement for the year using absorption costing.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Required information Exercise 19 - 3 (Algo) Income statement under absorption costing and variable costing LO P1, P2 Skip to question [The following information applies to the questions displayed below.] Cool Sky reports the following for its first year of operations. The company produced 44,000 units and sold 36,000 units at a price of $130 per unit. Direct materials $ 54 per unit Direct labor $ 20 per unit Variable overhead $ 6 per unit Fixed overhead $ 484,000 per year Variable selling and administrative expenses $10 per unit Fixed selling and administrative expenses $110,000 per year Exercise 19 -3 (Algo) Part 2b 2b. Assume the company uses variable costing. Prepare its income statement for the year under variable costing.
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5 Vista Company reports the following information. Direct materials Direct labor Variable overhead Fixed overhead Units produced Compute its product cost per unit under absorption costing. Multiple Choice $76.00. $152.00. $171.00. $ 44 per unit 64 per unit $ 44 per unit $ 380,000 per year 20,000 units < Pr
Exercise 19-7 (Algo) Income reporting under absorption costing and variable costing LO P2 Sims Company began operations on January 1. Its cost and sales information for this year follow. Direct materials $ 40 per unit Direct labor $ 60 per unit Variable overhead $ 40 per unit Fixed overhead $ 6,300,000 per year Variable selling and administrative expenses $ 11 per unit Fixed selling and administrative expenses $ 5,000,000 per year Units produced 105,000 units Units sold 75,000 units Sales price $ 350 per unit 1. Prepare an income statement for the year using variable costing.2. Prepare an income statement for the year using absorption costing.
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Exercise 19-3 (Algo) Income statement under absorption costing and variable costing LO P1, P2 Skip to question [The following information applies to the questions displayed below.]Cool Sky reports the following for its first year of operations. The company produced 42,000 units and sold 34,000 units at a price of $120 per unit. Direct materials $ 48 per unit Direct labor $ 18 per unit Variable overhead $ 6 per unit Fixed overhead $ 420,000 per year Variable selling and administrative expenses $ 12 per unit Fixed selling and administrative expenses $ 110,000 per year Exercise 19-3 (Algo) 1b. Assume the company uses absorption costing. Prepare its income statement for the year under absorption costing. 2a. Assume the company uses variable costing. Determine its total product cost per unit. 2b. Assume the company uses variable costing. Prepare its income statement for the year under variable costing.
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