Kenzi Kayaking, a manufacturer of kayaks, began operations this year. During this first year, the company produced 1,050 kayaks and sold 800 at a price of $1,050 each. At this first year-end, the company reported the following income statement information using absorption costing.
|
|
|
|
Sales (800 × $1,050) |
$ |
840,000 |
|
Cost of goods sold (800 × $500) |
|
400,000 |
|
Gross margin |
|
440,000 |
|
Selling and administrative expenses |
|
230,000 |
|
Net income |
$ |
210,000 |
|
|
Additional Information
- Product cost per kayak totals $500, which consists of $400 in variable production cost and $100 in fixed production cost—the latter amount is based on $105,000 of fixed production costs allocated to the 1,050 kayaks produced.
- The $230,000 in selling and administrative expense consists of $75,000 that is variable and $155,000 that is fixed.
Required:
1.Prepare an income statement for the current year under variable costing.
2. Fill in the blanks:
Extracted text: Kenzi Kayaking, a manufacturer of kayaks, began operations this year. During this first year, the company produced 1,050 kayaks and sold 800 at a price of $1,050 each. At this first year-end, the company reported the following income statement information using absorption costing. Sales (800 × $1,050) Cost of goods sold (800 x $500) Gross margin Selling and administrative expenses $ 840,000 400,000 440,000 230,000 Net income $ 210,000 Additional Information a. Product cost per kayak totals $500, which consists of $400 in variable production cost and $100 in fixed production cost-the latter amount is based on $105,000 of fixed production costs allocated to the 1,050 kayaks produced. b. The $230,000 in selling and administrative expense consists of $75,000 that is variable and $155,000 that is fixed. Required: 1. Prepare an income statement for the current year under variable costing. 2. Fill in the blanks: Complete this question by entering your answers in the tabs below. Required 1 Required 2 Fill in the blanks: The dollar difference in variable costing income and absorption costing income = units fixed overhead per unit. < required 1 this is a numeric cell, so please enter numbers only. required="" 1="" this="" is="" a="" numeric="" cell,="" so="" please="" enter="" numbers="">