Question

sims company a manufacturer of table computers, began operatins on January 1, 2019. Its cost and sales information for this year follows.

Sims Company, a manufacturer of tablet computers, began operations on January 1, 2019. Its cost and sales information for this year follows. 35 per unit 55 per unit 30 per unit $7,350,000 (per year) Manufacturing costs Direct materials Direct labor Overhead costs Variable Fixed Selling and administrative costs for the year Variable Fixed Production and sales for the year Units produced Units sold Sales price per unit $ 700,000 $4,500,000 105,000 units 75,000 units 350 per unit $ 1. Prepare an income statement for the year using variable costing. 2. Prepare an income statement for the year using absorption costing Complete this question by entering your answers in the tabs below. Required 1 Required 2 Drensesninenmatatamant for the stron wrishlarnetin

Answer 1

Solution SIMS COMPANY Variable Costing Income statement 26250000 2625000 4125000 Sales (75000x350) ress: variable costs; Direct Materials ( 75000x 75) Direct Laler (75000X 55) Voorlalte overhead coste (75000 X 30) Variable Selling and administqative expenses Total variable coste contribution Margen 2250000 700000 9700000 16550000

Less! fixed expense fixed Selling and adminpsleative costa fixed overhead costs 4500000 7350o0o 11850000 Total fixed expenser Net Income (loss) 4700000 SIMS COMPANY Absorption Costing Income statement Salez 26250000 Less: Cost of goods sold. Direct Materials 2625000 Direct Labor 4125000 7850000 5250000 14250000 12000 000 Variable overhead costs fixed overhead costs [ 1350000/105000 X 75000] Cost of goods sold Gross margen Selling general and administrative expenses, fixed selling and administrative Costs Vorlable selling and administrative expense Total selling general and administrative ерім Net Income (loss) 44500000 700000 5700000 68 00000