On July 31, 2016, the end of the first month of operations, Rhys Company prepare

Question

On July 31, 2016, the end of the first month of operations, Rhys Company prepared the following income statement, based on the absorption costing concept:

Rhys Company

Income Statement - Absorption Costing

For the Month Ended July 31, 2016

1

Sales (94,000 units)

$4,253,500.00

2

Cost of goods sold:

3

Cost of goods manufactured

$2,784,000.00

4

Less ending inventory (22,000 units)

528,000.00

5

Cost of goods sold

2,256,000.00

6

Gross profit

$1,997,500.00

7

Selling and administrative expenses

282,000.00

8

Income from operations

$1,715,500.00

Rhys Company

Income Statement - Absorption Costing

For the Month Ended July 31, 2016

Explanation / Answer

Solution:

a

b.

Rhys Company Income Statement - Variable costing For the Month Ended July 31, 2016 Sales ( 94,000 units )        4,253,500.00 Cost of Goods Sold Variable costing ( $ 2,784,000 - 139,200 fixed cost )             2,644,800.00 Less:Fixed cost ( 2,644,800*22,000/94,000)                 618,995.74 Cost of goods sold        2,025,804.26 Less: Variable selling and administrative expense            112,800.00 Contribution        2,114,895.74 Less: Fixed cost Manufacturing 139,200.00 Selling ( 282,000-112,800 ) 169,200.00 Income from operations        1,806,495.74

Related Questions

Navigate

• Browse (All)
• Browse O
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.