View History Develop Window Help Help S lomework Required information The follow

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View History Develop Window Help Help S lomework Required information The following information applies to the questions dlisplayed below Cool Sky reports the following costing data on its product for its first year of operations During this first year, the company produced 44,000 units and sold 36,000 units at a price of $130 per unit Nanufacturing cost s54 $20 birect materinls per wnit Variable overhead per uni Pixed overhead for the year 44,000D and adaini#trotive eost per unit 120.000 %. Assume the company uses absorption costing Prepare its income statement for the year under absorption costing 2 34Next >

Explanation / Answer

Unit product cost under Absorption Costing Direct materials per unit 54 direct labor per unit 20 variable overhead per unit 6 fixed overhead (484,000/44000) 11 unit product cost under Absorption costing 91                 Absorption Costing Income Statement               sales (36000*130) 4680000 less:Cost of goods sold Direct Materials (36000*54) 1944000 Direct labor (36000*20) 720000 Variable overhead per unit (36000*6) 216000 fixed manufacturing Oh (36000*11) 396000 3276000 gross profit 1404000 selling and administrative costs variable selling & adm (36000*10) 360000 fixed selling & adm 120,000 480,000 Net Operating income 924,000

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