Question

Rite Ade incurs the following costs for its powdered sports beverage mix in March: EE: (Click the icon to view inventory cost data.) : (Click the icon to view the March income statement.) Suppose that during April, the company produces 13,000 cases of powdered drink mix and sells 14,500 cases. Sale price, variable cost per case, and total fixed expenses remain the same as in March. Prepare the April income statement using variable costing

Answer 1

					Workings	Amount	Amount
	Sales Revenue				(14500 x $ 35)		$ 507,500.00
Deduct:	Variable expenses:
	Variable cost of goods sold:
	Beginning finished goods inventory				(2500 x $ 16)	$   40,000.00
	Variable cost of goods manufactured				(13000 x $ 16)	$ 208,000.00
	Variable cost of goods available for sale					$ 248,000.00
	Ending finished goods inventory				(1000 x $ 16)	$ (16,000.00)
	Variable cost of goods sold					$ 232,000.00
	Sales commission expense				(14500 x $ 1.75)	$   25,375.00	$ 257,375.00
	Contribution margin						$ 250,125.00
Deduct:	Fixed expenses:
	Fixed manu. OH					$   39,000.00
	Fixed marketing and adm. Expenses					$   25,500.00	$   64,500.00
	Operating income						$ 185,625.00

Is this correct?