Question

Amber Manufacturing manufactures a single product. Cost, sales, and production information for the company and its single product is as follows: (Click the icon to view the data) Read the requirements 275,500 More Info Contribution margin Less: Fored expenses Fixed manufacturing overhead Fixed operating expenses Operating income 204,000 45,000 25,500 $ • Sales price per unit $52 Variable manufacturing costs per unit manufactured (DM, DL and variable MOH) $29 Variable operating expenses per unit sold $4 Fixed manufacturing overhead (MOH) in total for the year S204.000 Faced operating expenses in total for the year $45,000 Units manufactured during the year 17,000 units Units sold during the year 14,500 units Requirement 2. Prepare an income statement for the upcoming year using absorption Amber Manufacturing Income Statement (Absorption Costing) For the Year Ended December 31 Sales revenue $ 754 000 Less: Cost of goods sold Gross profit Less Operating expenses Print Done

Answer 1

Answer-2)-

Amber Manufactuing
Contribution Margin statement (Using absorption costing approach)
Particulars			Amount
			$
Sales (a)	14500 units*$52 per unit		754000
Less:- Cost of goods sold (b)
Opening inventory
Add:- Cost of goods manufatured		697000
Variable manufacturing costs	17000 units*$29 per unit	493000
Fixed overhaed		204000
Cost of goods available for sale		697000
Less:- Closing inventory	2500 units*$41 per unit	102500	594500
Gross margin C= a-b			159500
Less:-Variable operating exp.	14500 units*$4 per unit		58000
Less:- Fixed costs
Operating exp.			46000
Net operating Income			55500

Explanation- Unit product cost under Absorption costing= Variable manufacturing cost + fixed manufacturing overhead

=$29+$12

= $41 per unit

Unit fixed manufacturing overhead= Fixed manufacturing overhead/No. of units produced

=$204000/17000 units

=$12 per unit