Reference no: EM131779816
On October 31, the end of the first month of operations, Morristown & Co. prepared the following income statement based on absorption costing:
| Morristown & Co. |
| Absorption Costing Income Statement |
| For Month Ended October 31, 20- |
| 1 |
Sales (2,600 units) |
|
$117,000.00 |
| 2 |
Cost of goods sold: |
|
|
| 3 |
Cost of goods manufactured |
$85,500.00 |
|
| 4 |
Less ending inventory (400 units) |
11,400.00 |
|
| 5 |
Cost of goods sold |
|
74,100.00 |
| 6 |
Gross profit |
|
$42,900.00 |
| 7 |
Selling and administrative expenses |
|
21,500.00 |
| 8 |
Income from operations |
|
$21,400.00 |
On October 31, the end of the first month of operations, Morristown & Co. prepared the following income statement based on absorption costing:
| Morristown & Co. |
| Absorption Costing Income Statement |
| For Month Ended October 31, 20- |
| 1 |
Sales (2,600 units) |
|
$117,000.00 |
| 2 |
Cost of goods sold: |
|
|
| 3 |
Cost of goods manufactured |
$85,500.00 |
|
| 4 |
Less ending inventory (400 units) |
11,400.00 |
|
| 5 |
Cost of goods sold |
|
74,100.00 |
| 6 |
Gross profit |
|
$42,900.00 |
| 7 |
Selling and administrative expenses |
|
21,500.00 |
| 8 |
Income from operations |
|
$21,400.00 |
If the fixed manufacturing costs were $42,900 and the variable selling and administrative expenses were $14,600, prepare an income statement using variable costing. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. A colon (:) will automatically appear if it is required. If a net loss is incurred, enter that amount as a negative number using a minus sign.
X Labels and Amount Descriptions
| Labels |
| Fixed costs |
| For Month Ended October 31, 20- |
| Amount Descriptions |
| Contribution margin |
| ending inventory |
| Fixed manufacturing costs |
| Fixed selling and administrative expenses |
| Income from operations |
| Manufacturing margin |
| Sales |
| Variable cost of goods manufactured |
| Variable cost of goods sold |
| Variable selling and administrative expenses |
X Variable Costing Income Statement
If the fixed manufacturing costs were $42,900 and the variable selling and administrative expenses were $14,600, prepare an income statement using variable costing. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. A colon (:) will automatically appear if it is required. If a net loss is incurred, enter that amount as a negative number using a minus sign.