50.1K

Verified Solution

Link Copied!

Exercise 19-4 Variable costing income statement LO P2 Kenzi Kayaking, a manufacturer of kayaks, began operations this year. During this first year, the company produced 1,075 kayaks and sold 825 at a price of $1,075 each. At this first year-end, the company reported the following income statement information using absorption costing. Sales (825 * $1,075) Cost of goods sold (825 * $400) Gross margin Selling and administrative expenses Net income $ 886,875 330,000 556.875 210,000 346,875 Additional Information a. Product cost per kayak totals $400, which consists of $300 in variable production cost and $100 in fixed production cost-the latter amount is based on $107,500 of fixed production costs allocated to the 1,075 kayaks produced. b. The $210,000 in selling and administrative expense consists of $85,000 that is variable and $125,000 that is fixed. Required: 1. Prepare an income statement for the current year under variable costing 2. Fill in the blanks: Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare an income statement for the current year under variable costing. KENZI KAYAKING Variable Costing Income Statement Required: 1. Prepare an income statement for the current year under variable costing. 2. Fill in the blanks: Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare an income statement for the current year under variable costing. KENZI KAYAKING Variable Costing Income Statement 11 11 TUL Net income (loss) DULY and ami Net income $ 346.875 Additional Information Product cost per kayak totals $400, which consists of $300 in variable production cost and $100 in fixed production cost-the latter amount is based on $107,500 of fixed production costs allocated to the 1,075 kayaks produced. b. The $210,000 in selling and administrative expense consists of $85,000 that is variable and $125,000 that is fixed. Required: 1. Prepare an income statement for the current year under variable costing. 2. Fill in the blanks: Complete this question by entering your answers in the tabs below. Required 1 Required 2 Fill in the blanks: The dollar difference in variable costing income and absorption costing income units fixed overhead per unit Required 1

Answer & Explanation Solved by verified expert

See Answer