18, Ceriweden, Inc. has provided the following financial data for the year: nits

Question

18, Ceriweden, Inc. has provided the following financial data for the year: nits produced and sold Sales price Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative costs Fixed manufacturing overhead Fixed selling and administrative costs 3,500 units $220 per unit $25 per unit S45 per unit $30 per unit $20 per unit $105,000 per year S140,000 per year There are no beginning inventories. Prepare an income statement for the year using a.) the traditional format b.) contribution margin format.

Explanation / Answer

a.traditional format income statement.

b.contribution format income statement:

Sales revenue (3,500 * $220) $770,000 less: cost of goods sold ($105,000 fixed manufacturing over head) + ($25+$45+$30)*3,500 units (455,000) Gross profit $315,000 operating expenses: Sellling and administrative costs ($20 * 3,500 units) + ($140,000 fixed cost) ($210,000) operating income $105,000

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