High Country, Inc., produces and sells many recreational products. The company h

Question

High Country, Inc., produces and sells many recreational products. The company has just opened a new plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month of the plant’s operation:

   

  

    Management is anxious to see how profitable the new camp cot will be and has asked that an income statement be prepared for May.

  

  

    

Prepare an income statement for May.

        

  

        

Prepare a contribution format income statement for May.

  Beginning inventory 0      Units produced 50,000      Units sold 45,000      Selling price per unit $79      Selling and administrative expenses:     Variable per unit $2        Fixed per month $ 567,000      Manufacturing costs:     Direct materials cost per unit $15        Direct labor cost per unit $9        Variable manufacturing overhead cost per unit $2        Fixed manufacturing overhead cost per month $ 1,000,000    b. Prepare an income statement for May High Country, Inc. Absorption Costing Income Statement Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income

Explanation / Answer

Solution:-

1 a) Cost per unit is as follow

b) Statement of Income is as follow

2.

Particular Per Unit Direct Material Cost $15.0 Direct Labor Cost $9.0 Variable Mfg Cost $2.0 Fixed Mfg Overheads $20.0 (1,000,000/50,000) COGS $46.0 Selling Variable Cost $2.0 Selling and administrative expenses $12.6 (567,000/45,000) Total Cost per Unit $60.6

Related Questions

Navigate

• Browse (All)
• Browse H
• Subjects

---

---

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