Question

Instructions Income Statement Tudor Manufacturing Co Income Statement- Variable Costing A. Prepare an absorption costing income statement. Refer to the Labels and Amount Descriptions list provided for the exact wording of For the Month Ended June 30, 2016 the answer choices for text entries. "Less" or "Plus" and colons will automatically appear if it is required. In your computations, round Sales (420,000 units) $8.290,000.00 1 unit costs to two decimal places and round final answers to the nearest dollar. Variable cost of goods sold: 2 3Variable cost of goods manufactured (490,000 units $16 per unit) $7,840,000.00 Tudor Manufacturing Co 4Less ending inventory (70,000 units $16 per unit) 1,120,000.00 Income Statement - Absorption Costing Variable cost of qoods sold 6,720,000.00 5 For the Month Ended June 30, 2016 $1,570,000.00 6 Manufacturing margin 1 7Variable selling and administrative expenses 82,000.00 2 Label) 8 Contribution margin $1.488.000.00 9 Fixed costs: 4 Fixed manufacturing costs $137,200.00 10 Fixed selling and administrative expenses 74,000.00 211,200.00 6 12 Income from operations $1,276,800.00 7 8 Required: A. Prepare an absorption costing income statement. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. "Less or "Plus and colons will automatically appear if it is required. In your computations, round unit costs to two decimal places and round final answers to the nearest dollar. B. Reconcile the variable costing income from operations of $1,276,800 with the absorption costing income from operations determined in (A). Enter all amounts as positive numbers

Answer 1

Answer-A:

Tutor Manufacturing Co. Income Statement-Absorption Costing For the month ended June 30, 2016 Sales $ 8,290,000 $16.28) Less: Cost of goods sold: Beginning inventory Cost of goods manufactured (490000 Cost of goods available for sale Less: Ending inventory (70,000 $16.28) Gross profit Less: Selling & administrative expense Contribution margin $ 7,977,200 7,977,200 1,139,600 6,837,600 $ 1,452,400 156,000 $ 1,296,400

Answer-B:

$ 1,276,800 Reconciliation of Income from Operation: Income from operation under Variable costing Add: Fixed manufacturing overhead deferred in inventory (70,000 units x $0.28) Income from operation under Absorption costing $ 19,600 $ 1,296,400