The following information is available for Skipper Pools, a manufacturer of abov

Question

The following information is available for Skipper Pools, a manufacturer of above-ground swimming pool kits:

In its first year of operation, the company produced 12,420 units but was able to sell only 10,500 units. In its second year, the company needed to get rid of excess inventory (the extra 1,920 units produced but not sold in 2014), so it cut back production to 8,580 units

1.Calculate profit for both years using full costing. net profit for 2014? net profit for 2015?

2.Calculate profit for both years using variable costing.

2014 2015 total ubits produced 12420 8580 21000 units sold 10500 10500 21000 selling price per unit 4180 4180 direct material 800 800 direct labor per unit 1600 1600 variable manufacturing OH per unit 255 255 fixed manufacturing Oh per year 2,558,520 2,558,520 fixed selling & administrative expernse per year 1,535,400 1,535,400

Explanation / Answer

Answer:1

Answer:2

Full costing Income Statement Particulars 2014 2015 Sales 43890000 43890000 Cost o goods sod: Beg. Inventory $0 5493120 Add: Cost of goods manufactured 35533620 25338413.1 Goods available for sale $35,533,620 $30,831,533 Less: ending inventory 5493120 0 Cost of goods sold $30,040,500 $30,831,533 Gross margin $13,849,500 $13,058,467 Selling and administrative expenses 1535400 1535400 Operating income $12,314,100 $11,523,067

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