Required information Exercise 6-9 Income statement under absorption costing and

Question

Required information Exercise 6-9 Income statement under absorption costing and variable costing LO P1, P2 The following information applies to the questions displayed below/ the company produced 42,000 units and sold 34,000 units at a price of $150 per unit g costing data on its product for its first year of operations. During this first year Manufacturing costs s66 25 Direct materials per unit Direct labor per unit Variable overhead per unit Fixed overhead for the year $546, 000 Selling and administrative costs Variable selling and administrative cost per unit s 11 Fixed selling and administrative cost per $10, 000 year

Explanation / Answer

Sales 5100000 Less: Variable expenses Variable production costs 3400000 Variable selling and administrative expenses 374000 Total variable costs 3774000 Contribution margin 1326000 Less: Fixed expenses Fixed overhead costs 546000 Fixed selling and administrative expenses 100000 Total fixed expenses 646000 Net income (loss) 680000

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