Intro to Managerial Accounting, Managerial Accounting

Assignment Help:

I don''t know how to do a variable income statement. Here is my assignment:

The Used Books Company is a small online retailer operating out of a garage apartment. The owner buys books at garage sales, thrift shops, library sales, and whenever an opportunity arises. The company classified all books into five categories based on cost of acquisition and estimated sales price. See below for details about books purchased and sold during the last year (20XX).

Price Categories

A
B
C
D
E

Units Sold
2,000
1,000
500
400
400

Units Purchased
3,000
1,200
1,000
1,000
1,000

Resale Price
$4.00
$15.00
$25.00
$45.00
$40.00

Cost
$0.50
$5.00
$10.00
$20.00
$20.00

In addition to purchasing inventory (used books), The Used Book Store incurs some operating expenses.

Variable operating expenses

Shipping per book
$ 1.50

Fixed expenses

Internet-related costs
$5,000

Travel, etc.
2,000

Advertising
1,000

Other overhead
3,000

Required:

Prepare a variable costing (behavioral) income statement for the company in good format.
Prepare a second variable costing statement assuming 90% of all the books in each category purchased were actually sold.
Prepare a third variable costing statement assuming that the price is increased by 50% for all five categories (use original sales information

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