Can anyone help me with this please? Thanks On January 1 of the current year, To

Question

Can anyone help me with this please? Thanks

On January 1 of the current year, Townsend Co. commenced operations. It operated its plant at 100% of capacity during January. The following data summarized the results for January: Units 50,000 Production Sales ($18 per unit) 42.000 Inventory, January 31 3.0 Manufacturing costs: $575,000 Variable 80,000 Fixed Total Selling and administrative expenses 35,000 Variable Fixed 10,500 Total Hide a. Prepare an income statement using absorption costing. b. Prepare an income statement using variable costing.

Explanation / Answer

Income Statement Using Absorption Approach Total sales $            756,000 Beginning Inventory $                   -   Cost of Goods Manufactured $        655,000 Cost of Goods Available $        655,000 Ending Inventory $        104,800 Cost of Goods Sold $            550,200 Gross Margin $            205,800 Selling and Administrative Expenses $              45,500 Net Income $            160,300 Income Statement Using Contribution Approach Total sales $            756,000 Variable cost: Variable Manufacturing Cost $        483,000 Variable selling and administrative expenses $          35,000 Total variable cost $            518,000 Contribution $            238,000 Fixed cost: Fixed indirect production $          80,000 Fixed selling and administrative expenses $          10,500 Total fixed cost $              90,500 Net Income $            147,500

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