Question

b. Prepare an income statement for the year. (Do not leave any empty spaces; input a 0 wherever it is required.) $ 1,872,000 Variable Costing Income Statement Sales Variable expenses: Variable cost of goods sold: Beginning inventory Less: Variable manufacturing costs Goods available for sale Less: Ending inventory Variable cost of goods sold 1,872,000 Fixed expenses: Fixed manufacturing overhead Fixed selling and administrative 318,150 201,600 I 519,750 1,352,250

FILL IN THIS INCOME STATMENT

Baxtell Company manufactures and sells a single product. The following costs were incurred during the company’s first year of operations:

Variable costs per unit:
Manufacturing:
Direct materials	$	22
Direct labour		7
Variable manufacturing overhead		6
Variable selling and administrative		9
Fixed costs per year:
Fixed manufacturing overhead		318,150
Fixed selling and administrative expense		201,600

During the year, the company produced 35,350 units and sold 28,800 units. The selling price of the company’s product is $65 per unit.

Answer 1

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Answers are highlighted in yellow: Solution: 1872000 Variable Costing Income Statement Sales (28800*65) Variable Expenses: Variable Cost of goods sold: Beginning Inventory Add: Variable Manufacturing Costs (35350)*(22+7+6) Goods available for sales Less: Ending Inventory (35350-28800)*(22+7+6) Variable Cost of goods sold Variable Selling and admin expenses (28800*9) Contribution Margin Fixed Expenses: Fixed Manufacturing overhead Fixed Selling and Administrative Expense Net Operating income (loss) 1237250 1237250 229250 1008000 259200 1267200 (1008000+259200) 604800 318150 201600 519750 85050