n July 31, the end of the first month of operations, Del Ray Equipment Company p
ID: 2466718 • Letter: N
Question
n July 31, the end of the first month of operations, Del Ray Equipment Company prepared the following income statement, based on the variable costing concept:
Del Ray Equipment Company
Variable Costing Income Statement
For the Month Ended July 31, 2016
1
Sales (45,000 units)
$5,400,000.00
2
Variable cost of goods sold:
3
Variable cost of goods manufactured
$3,480,000.00
4
Less ending inventory (13,000 units)
780,000.00
5
Variable cost of goods sold
2,700,000.00
6
Manufacturing margin
$2,700,000.00
7
Variable selling and administrative expenses
1,395,000.00
8
Contribution margin
$1,305,000.00
9
Fixed costs:
10
Fixed manufacturing costs
$549,000.00
11
Fixed selling and administrative expenses
489,500.00
1,038,500.00
12
Income from operations
$266,500.00
Prepare an income statement under absorption 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. “Less”, “Plus” or colons (:) will automatically appear if required. If a net loss is incurred, enter that amount as a negative number using a minus sign. Round your cost per unit answer to 2 decimal places & final answers to nearest whole dollar.
Prepare an income statement under absorption 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. “Less”, “Plus” or colons (:) will automatically appear if required. If a net loss is incurred, enter that amount as a negative number using a minus sign. Round your cost per unit answer to 2 decimal places & final answers to nearest whole dollar.
Score: 46/66
Del Ray Equipment Company
Absorption Costing Income Statement
1
2
Cost of goods sold:
3
4
5
6
7
8
Del Ray Equipment Company
Variable Costing Income Statement
For the Month Ended July 31, 2016
Explanation / Answer
Del Ray Equipment Company
Income Statement for July under absorption costing:
$ $ Sales 5,400,000 Cost of goods sold 3,125,948 Gross profit 2,274,052 Less non manufacturing costs: Variable selling and administrative expenses 1,395,000 Fixed selling and administrative expenses 489,500 1,884,500 Income from operations 389,552Related Questions
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