E21-19 (similar to) Question Help In May 2018, RefreshAde produced 20,000 cases

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E21-19 (similar to) Question Help In May 2018, RefreshAde produced 20,000 cases of powdered drink mix and sold 21,000 cases, of which 1,000 were produced in Apri.The sales price was $28, variable costs were $12 per case (S9 manufacturing and $3 selling and administrative), and total fixed costs were $85,000 (S60,000 manufacturing and $25,000 selling and administrative) Read the nequirements Requirement 1. Prepare the May income statement using variable costing. RefreshAde Income Statement (Variable Costing) Month Ended May 31, 2018 Contribution Margin Requirements 1. Prepare the May income statement using variable costing 2. Determine the balance in Finished Gocds Inventory as of May 31 Print Done Operating Income Choose from any list or enter any number in the input fields and then click Check Answer

Explanation / Answer

1) Prepare income statement under variable costing :

b) Balance in finished goods inventory = 0

sales (21000*28) 588000 Variable cost Variable cost of goods sold (21000*9) (189000) Variable selling and administrative expense (21000*3) (63000) (252000) Contribution margin 336000 Fixed cost Fixed manufacturing overhead (60000) Fixed selling and administrative expense (25000) (85000) Net operating income 251000

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