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O'Neill's Products manufactures a single product. Cost, sales, and production information for the company and i...

ONeills Products manufactures a single product. Cost, sales, and production information for the company and its single prod

O'Neill's Products manufactures a single product. Cost, sales, and production information for the company and its single product is as follows: (Click the icon to view the data.) Read the requirements. Requirement 1. Prepare an income statement for the upcoming year using variable costing. O'Neill's Products X More Info Contribution Margin Income Statement (Variable Costing) For the Year Ended December 31 S 390,000 Sales revenue Selling price per unit is $65 Variable manufacturing costs per unit manufactured (includes direct materials [DM], direct labor [DL], and variable MOH) $36 Variable operating expenses per unit sold $3 Fixed manufacturing overhead (MOH) in total for the year $66,000 Fixed operating expenses in total for the year $88,000 Units manufactured and sold for the year 6,000 units Variable expenses Less: 216,000 Variable cost of goods sold 18,000 Variable operating expenses 156,000 Contribution margin Less: Fixed expenses 66,000 Fixed manufacturing overhead 88,000 Fixed operating expenses Print Done 2,000 Operating income Requirement 2. Prepare an income statement for the upcoming year using absorption costing. O'Neill's Products Income Statement (Absorption Costing) For the Year Ended December 31 Less: Less
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ReportAnswer #1
O'Neil's Products
Contribution Margin Income Statement (Variable Costing)
For the year ended December 31
Sales Revenue 390000
Less: Variable Expenses
Variable Cost of Goods Sold 216000
Variable Operating Expense 18000
234000
Contribution Margin 156000
Less: Fixed Expenses
Fixed Mfg. Overhead 66000
Fixed Operating Expense 88000
154000
Operating Income 2000
O'Neil's Products
Income Statement (Absorption Costing)
For the year ended December 31
Sales Revenue 390000
Less: Variable Cost of Goods Sold 216000
Fixed Mfg. Overhead 66000
Gross Profit 108000
Less: Operating Expenses
Variable Operating Expense 18000
Fixed Operating Expense 88000
106000
Operating Income 2000

Since there is no beginning & ending inventory, income calculated under both the methods is same

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