Absorption and Variable Costing Income Statements
During the first month of operations ended July 31, YoSan Inc.manufactured 9,900 flat panel televisions, of which 9,200 weresold. Operating data for the month are summarized as follows:
| Sales | | $1,334,000 |
| Manufacturing costs: | | |
| Direct materials | $673,200 | |
| Direct labor | 198,000 | |
| Variable manufacturing cost | 168,300 | |
| Fixed manufacturing cost | 89,100 | 1,128,600 |
| Selling and administrative expenses: | | |
| Variable | $110,400 | |
| Fixed | 50,800 | 161,200 |
Required:
1. Prepare an income statement based on theabsorption costing concept.
| YoSan Inc. |
| Absorption Costing Income Statement |
| For the Month Ended July 31 |
| Sales | | $ |
| Cost of goods sold: | | |
| Cost of goods manufactured | $ | |
| Inventory, July 31 | | |
| Total cost of goods sold | | |
| Gross profit | | $ |
| Selling and administrative expenses | | |
| Income from operations | | $ |
2. Prepare an income statement based on thevariable costing concept.
| YoSan Inc. |
| Variable Costing Income Statement |
| For the Month Ended July 31 |
| Sales | | $ |
| Variable cost of goods sold: | | |
| Variable cost of goods manufactured | $ | |
| Inventory, July 31 | | |
| Total variable cost of goods sold | | |
| Manufacturing margin | | $ |
| Variable selling and administrative expenses | | |
| Contribution margin | | $ |
| Fixed costs: | | |
| Fixed manufacturing costs | $ | |
| Fixed selling and administrative expenses | | |
| Total fixed costs | | |
| Income from operations | | $ |
Salespersons' Report and Analysis
Walthman Industries Inc. employs seven salespersons to sell anddistribute its product throughout the state. Data taken fromreports received from the salespersons during the year endedDecember 31 are as follows:
| Salesperson | Total Sales | Variable Cost of Goods Sold | Variable Selling Expenses |
| Case | $603,000 | | $241,200 | | | $132,660 | | |
| Dix | 505,000 | | 161,600 | | | 111,100 | | |
| Johnson | 488,000 | | 185,440 | | | 73,200 | | |
| LaFave | 523,000 | | 271,960 | | | 73,220 | | |
| Orcas | 591,000 | | 200,940 | | | 82,740 | | |
| Sussman | 384,000 | | 218,880 | | | 76,800 | | |
| Willbond | 544,000 | | 184,960 | | | 92,480 | | |
Required:
1. Prepare a table indicating contributionmargin, variable cost of goods sold as a percent of sales, variableselling expenses as a percent of sales, and contribution marginratio by salesperson. Round percents to the nearest whole number.Enter all amounts as positive numbers.
| Waltham Industries Inc. |
| Salespersons' Analysis |
| For the Year Ended December 31 |
| Salesperson | Contribution Margin | Variable Cost of Goods Sold as a Percent of Sales | Variable Selling Expenses as a Percent of Sales | Contribution Margin Ratio |
| Case | $ | % | % | % |
| Dix | | % | % | % |
| Johnson | | % | % | % |
| LaFave | | % | % | % |
| Orcas | | % | % | % |
| Sussman | | % | % | % |
| Willbond | | % | % | % |
