Below is the traditional budgeted income statement for Puget Concrete. Income St

Question

Below is the traditional budgeted income statement for Puget Concrete. Income Statement (traditional) Sales 71,312,500 C of GS 55,050,000 Gross profit 16,262,500 - Admin 2,000,000 Oper Earnings 14,262,500 Tax 4,991,875 Net Income 9,270,625 Required: Develop a budget income statement in variable costing format for Puget Concrete for the year based on the traditional Income Statement and the cost information provided on the Instructions tab (tax rate = 35%). Show separate lines for fixed and variable costs by cost element. Income Statement (variable costing) Total Amount Sales (same as traditional) less variable costs: Contribution Margin less fixed costs: Earnings before taxes less Tax expense Net Income Below is the traditional budgeted income statement for Puget Concrete. Income Statement (traditional) Sales 71,312,500 C of GS 55,050,000 Gross profit 16,262,500 - Admin 2,000,000 Oper Earnings 14,262,500 Tax 4,991,875 Net Income 9,270,625 Required: Develop a budget income statement in variable costing format for Puget Concrete for the year based on the traditional Income Statement and the cost information provided on the Instructions tab (tax rate = 35%). Show separate lines for fixed and variable costs by cost element. Income Statement (variable costing) Total Amount Sales (same as traditional) less variable costs: Contribution Margin less fixed costs: Earnings before taxes less Tax expense Net Income

Explanation / Answer

Income Statement(Variable Costing) Amount Sales          71,312,500 Less: Variable Expenses          55,050,000 Contribution Margin          16,262,500 Less: Fixed Costs Admin OH            2,000,000 Earnings Before Taxes          14,262,500 Less: Taxes @35%            4,991,875 Net Income            9,270,625

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