Question

Speedwagon Inc. shows the following information for 2019: Direct materials (variable) € 31,400 Direct labor (variable) C 19,500 Manufacturing overhead (fixed) C 84,600 Selling and advertising costs (variable) € 6,800 Selling and marketing costs (fixed) €21,500 Other operating expenses (fixed) € 146,000 Interest expenses € 18,000 Income tax expense 30% of pre-tax income Depreciation and amortization charges represent 20% of Manufacturing overhead, 5% of fixed Selling and marketing expenses, and 15% of other operating expenses. During the year, the company manufactured 1,850 units of finished goods and to sold 1,640 units at €220 each. The company also distributed 30 units of products for promotion. There are no inventories of materials and work in progress. Required: 1. Prepare the income statement using the cost of goods sold format, clearly showing the EBIT; 2. Prepare the income statement using the total outpux format. clearly showing the EBITDA and the EBIT.

Answer 1

1) Income statement using cost of goods sold

2) Income statement using total output format.

Income Statement - Speedwagon Inc. you the year ended 2019 lin €) Sales 3,60,800 Revenue (164ounits X & 220 less Cost of goods a Divut material durut labor Variable) - Manufacturing overhead Add closing stock of Inventory - L1856-1640) X$ 2200 (31,400) (19,500) ( 84,600) 46200 а драз риор. less sulling and advertising cost less Selling and marketing Clcast less othele operating Expense less depreciation and Laimoitization charges t84600X. 20% + 21S0OX Oy: + 146 soox 150 I earning Before Interest & Tan 2,71,500 (6800) (21500) [146000) (39,895) 57305 es Scanned with CamScanner

2) --------- Income Statement total output Methool. (int) Revenue 3,60,800 lees Coat of Goods Solel (89300) (31,400+ 19,500 +84600-). - 46,200 - quoss profit 2,71500 less Enpinces Selling and advertising cost (28,300) Itined + Variable others operating Empenses (1,46,000) EBITDA 97,200 less depreciation and (39895) amestization EBIT 57305.